FAW Car Q1 sales flat, net profit down 20.24%

Shanghai, April 30 (Gasgoo.com) FAW Car Co Ltd, a listed unit of major Chinese automaker FAW Group, announced today that its first-quarter sales were flat and net profit came to 290 million yuan ($42.46 million), down 20.24% from a year earlier, xinhuanet.com reported.

In the first three months this year, FAW Car sold slightly more than 30,000 vehicles and achieved sales revenue of 5 billion yuan, only up 2.35% year on year (y/y), with net profit of 290 million yuan, down 20.24% y/y.

The profit drop is mainly due to the company's sales pattern change and its products' falling profitability. The global crisis and increasing competition are also listed among the factors behind the company's flat sales in the first quarter. The Mazda 6 started to have its price cuts by about 20,000 yuan in mid-2008, which has also dragged down the sales profit of the company.

The two major car models currently produced and sold by FAW Car are Mazda 6 and Besturn B70. The Mazda 6 sells 4,000-5,000 units each month as the main source of profit for the company. However, the own brand Besturn is gaining more recognition and will become a heavyweight model of FAW Car.

FAW Car will explore broader market, adjust the product lineup, work out better sales strategies, and launch more new models to boost its market growth. The new Mazda 6 Ruiyi launched two weeks ago and the Besturn B50 released last month have enriched the company's product portfolio.