FAW Car H1 net profit doubles to 688 mln yuan

Shanghai, July 29 (Gasgoo.com) FAW Car Co Ltd announced that its net profit in the first half more than doubled that of the same period of last year, while industry insiders warned that the market conditions in the second half will not be so favorable and the whole year growth will slow, reported Beijing Morning newspaper today.

Data released by FAW Car showed that the total profit of FAW Car in the first half of the year reached 688 million yuan ($100.58 mln), up 231% over the same period of last year. The net profit also surged by 206% to 505 million yuan. FAW said the high profit was prompted by auto market increase both at home and abroad, improved marketing management and cost reduction.

The Besturn and Mazda series, the major product lineups under FAW, both enjoyed positive sales growth during the January-June period. The general sales of Besturn in this period soared by 175% year on year with average month sales reaching 3800 units. The January sales even hit 5,000 units under 50,000 sales target for Besturn in 2008. Mazda sales for the first half increased by 46% year on year with monthly average sales at 5,770 units in the period.

However, analysts said the high growth rate is based on the relatively low figures of last year. Given the economic expectations of the whole year, FAW will face even worse market conditions in the second half.

FAW Car may see a fall of the whole year’s net profit growth compared to the first half as the Besturn lineup, with sales increasing from the second half of last year, has set a big sales basis, and a cost rise will be brought by the upcoming Mazda 6 and Besturn B50.