FAW Car's net profit falls nearly 40% in first half of year

Gasgoo.com (Shanghai August 26) - FAW Car earned a net profit of 804 million yuan ($125.9m) in the first half of the year, p5w.net reported today. The amount, which was quoted from an official company report, represents a fall of 39.87 percent for the FAW Group subsidiary.

The company's total returns totaled 19.1 billion yuan ($2.99b) for the first six months, with stock value reaching .4938 yuan ($.0773). According to sources from within the manufacturer, the lackluster performance is due to many unpredicted events in the market, including the American credit crisis, the phasing out of vehicle purchasing subsidies, the rising price of gasoline and the introduction of vehicle purchase restrictions. The company also cited rising costs and lowered prices as a key cause behind its losses. According to the report, the manufacturer only managed sales of just over 140,000 vehicles in the first half of the year.

The manufacturer is keeping realistic hopes for the third quarter, with predicted net profit of between 357 million yuan and 893 million yuan ($55.94m-$139.93m), equivalent to a year-on-year decrease of 50 to 80 percent.