Hefei Changan receives RMB 421 million fiscal subsidies

Shanghai (Gasgoo)- Chongqing Changan Automobile Co., Ltd (Changan Automobile) posted an announcement on October 7 that its wholly-owned subsidiary Hefei Changan Automobile Co., Ltd (Hefei Changan) received RMB 300 million ($42 million) subsidies for the new model R&D and RMB 121 million ($17 million) fixed assets investment subsidies from Hefei High-tech Industrial Development District on September 29.

Hefei Changan, one of Changan’s PV production bases, mainly produces the Changan CS75 PLUS, the Changan CS15 and the Eado DT. 

(Photo source: Changan)

It is the third time for the automaker to receive fiscal subsidies. On June 28, the company obtained RMB 300 million from the district government. Up to now, the subsidies Hefei Changan has received totaled RMB 720 million ($101 million).

Besides, Changan Automobile received RMB 350 million ($49 million) subsidies from the Chongqing Finance Bureau on June 28.  

Changan Automobile is still in the red in spite of those subsidies. Its revenue and net profit in the first half of 2019 were RMB 29.98 billion ($4.20 billion) and –RMB 2.24 billion (-$0.31 billion) respectively, a year-on-year slide of 16.2% and a nosedive of 239.2%, according to the financial report from Changan Automobile. The drop mainly resulted from the sales plunge. In that period, the sales volume of 825,000 units slumped by 32% over the first half year of 2018.       

The sales from Jan. to Aug. (505,000 units) of the Changan brand fell by 26.4%. As to the joint ventures, Changan Ford and Changan Mazda both showed decrease in sales. Moreover, CAPSA only sold over a hundred units in several months.

It is waiting to see whether the Q4 sales can reverse the downturn trend.