Automaker profits low as April sales hit new high

Shanghai, May 8 (Gasgoo.com) China's passenger car sales in April rose 37.4% from a year earlier to a record high, the country's official industry association said today. But Chinese automakers are in no mood to celebrate as the double-digit growth, mostly in compact models, have done little to boost company profits, Reuters reported.

Nineteen out of 61 domestically-listed automakers and parts suppliers posted losses from January to March, compared with 10 in the same period last year, data provided by Guotai Junan Securities showed.

Several big auto groups, from SAIC Motor to Chongqing Changan Auto, reported steep falls in their first quarter earnings despite brisk vehicle sales. "A lot of the volume was coming from compact cars and minivans as buyers for such models could get tax incentives or subsidies. And small cars mean thin margins," said an analysts with ABN AMRO TEDA Fund Management.

Chen was referring to Beijing's stimulus policies implemented earlier this year, including halving of purchase tax on small cars (with engines of 1.6 liters and less) to 5% and subsidies to farmers who trade in their high-emission vans and trucks for fuel-efficient ones.

Passenger car sales climbed to 831,000 units in April, up from 604,900 units from a year earlier and 772,400 in March, data from the China Association of Automobile Manufacturers showed.