Many automakers see '08 profit drop over 50%

Shanghai, February 3 (Gasgoo.com) Many Chinese automakers including Changan Auto, SAIC, FAW Xiali and Jianghuai, have warned that their net profit for 2008 may have dropped by 50 to 100 percent due to sluggish demand and higher material costs.

Changan Auto, Ford Motor's China partner, said unaudited 2008 net profit was at roughly 38.93 million yuan ($5.7 million), down from 666.89 million yuan of 2007.

SAIC expects a 50 percent fall in its unaudited net profit in 2008, hit in part by its investment in Korea's Ssangyong Motor, which has filed for bankruptcy protection due to severe liquidity problems. SAIC earned a net profit of 4.63 billion yuan, or 0.708 yuan per share, in 2007.

In addition, Tianjin FAW Xiali Automobile Co predicts its 2008 net profit drop by more then 50 percent to some 100 million yuan, citing higher material costs and lower sales as reasons.

Jianghuai Auto expects its net profit in 2008 to fall by more than 50 percent from 328 million yuan achieved in the previous year.

It was hit badly as car sales at the joint venture fell by 20,000 vehicles, or 5.9 percent, this year, after a 60 percent jump in 2007. The sales of Changan Auto's own-brand vehicles dropped by 27,000 units last year from 2007.