Changan expected to gain profit in Q1 from the year-ago net loss
Shanghai (Gasgoo)- Chongqing Changan Automobile Co., Ltd. (Changan) expects its 2020's first-quarter (Q1) net profit attributable to shareholders reach RMB500 million to RMB750 million, shooting up 123.85% to 135.78% from the net loss of RMB2,096.350 million for the same period a year ago.
Changan said the turnaround should be mainly thanks to its improvements in product structure and profitability. Besides, the introduction of new strategic investors for its subsidiary Chongqing Changan New Energy Automobile Co., Ltd. is likely to increase the non-recurring gains and losses by RMB2.2 billion for the same period. In this transaction, Changan gave up its pre-emption right.
Affected by the coronavirus eruption, Changan witnessed its Q1 sales decline 32.1% over a year ago to 303,078 units. However, the decrease in March sales significantly contracted to 28.7%, versus the 43.3% drop in China's overall auto sales.
One of bright spots is the revival of Changan Ford's performance. According to Changan's sales report, the Sino-U.S. joint venture sold 30,456 new vehicles in the first quarter, posting a 17.2% year-on-year decrease, the smallest one among Changan's subsidiaries. Its March sales dipped 27.9% from the year-ago period, helping Changan outpace the overall auto industry. Reportedly, it even over-fulfilled the retail sales target set for March, in part thanks to a series of measures adopted to support its dealers.
(Photo source: Lincoln's WeChat account)
As for new products, the all-new Lincoln Corsair, the first China-built Lincoln-branded model, hit the market on March 12.
Changan published on the same day its 2019 annual results. The automaker saw the full-year gross revenue climb 6.48% over a year earlier to RMB70.595 billion, while posted a net loss attributable to shareholders of RMB2.647 billion, a nosedive of 488.81% from a profit of RMB680.728 million for the prior-year period. Much of blame has been laid on the decrease in the investment proceeds from its joint ventures and associates.
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