Chongqing Changan Automobile forecasted to suffer 2019 net loss of over RMB2.4 billion

Shanghai (Gasgoo)- Chongqing Changan Automobile Co., Ltd. (Changan) reported it is expected to suffer an annual loss of RMB2.4 billion-2.9 billion for the year of 2019, a year-on-year slump of 452.56%-526.01% from a net profit of RMB680,728,400 attributable to shareholders for the previous year.

As for the reason leading to the huge profit drop, much of the blame has been laid on the “sales volume slid”, according to Changan's statement. Last year, the Chongqing-based automaker saw its full-year sales fell 15.2% over a year ago to 1,759,971 units. Among five major subsidiaries, only Hefei Changan closed its 2019 with a rising sales performance. Notably, the sales of the main profit contributor Changan Ford were more than halved over the year-ago period.

To put sales back on track, the Sino-U.S. joint venture is speeding up the roll-out of new products. After three new models—the all-new Focus Active, the all-new Taurus and the new Edge ST/ST-Line—hit the market in last August, Changan Ford showcased the strategic model, the all-new Ford Escape, at the Auto Guangzhou 2019.

Although the performance throughout the whole year plunged, Changan Ford gained a tiny growth of 0.7% in the year-end spurt, tiny but considerably significant as this was the first-time year-over-year increase the joint venture made for the past two years. It seems that the cooperation between Ford and Changan Automobile deepened for the sake of Changan Ford did generate some positive effects.

In a bid to reverse the sales downturn, Changan has put forth plentiful efforts to slim down in terms of non-performing cost and introduce new financing supporters. In last November, the automaker submitted an application saying it intended to transfer 50% equity stake in the Sino-French joint venture Changan PSA (CAPSA). Then Changan announced in early December its agreement of introducing four strategic investors for its wholly-owned NEV arm, Chongqing Changan New Energy Automobile Co., Ltd (Changan New Energy).