FAW Car's sales and income grow in 2014 H1, but net profit falls

Gasgoo.com (Shanghai September 4) - FAW Car released its financial performance report for the first half of 2014 this week, the Beijing Times reported today. According to the report, the manufacturer's retail sales achieved year-on-year growth of 28.88 percent over the first half of this year. However, due to increasing sales costs, FAW Car's net profit actually fell during that same time period.

Official statistics show that FAW Car's sales over the first six months of this year exceeded 130,000 units; this increase was due to new models such as the Besturn X80 and Besturn B70. In addition to sales, the manufacturer's income also grew 18.24 percent over this time period. Despite the increases in sales and income, FAW Car's net profits actually decreased 49.63 percent, totaling just 316 million RMB ($51.31m). FAW Car explains that, due to the amount of work it has put in marketing for its new models, sales costs have also increased, eventually causing net profits to fall.

News from FAW Car's sister company FAW Xiali was not nearly as good. According to data, FAW Xiali sold just 37,301 vehicles in the first half of this year, a full 47.85 percent less than 71,526 vehicles it sold in the first half of 2013. The manufacturer suffered a net deficit of 436 million RMB ($70.79m). FAW Xiali's sales have been falling continuously for the last two years. Its financial performance has suffered as a result. The manufacturer attributes its poor financial performance to decreasing sales of both its vehicles and those of subsidiary Tianjin FAW Toyota. After two years of restructuring, Tianjin FAW has added the brand new Junpai product line, which will be sold in addition to its existing Xiali and Weizhi products. The first Junpai model, the Junpai D60 (pictured), will make its market debut next month.