Major carmakers see H1 profit growth down 35%

Shanghai, August 12 (Gasgoo.com) China’s major automakers suffered a slowdown both in sales revenue and profit growth in the first half of 2008, with profit growth dropping by 35.38%, reported National Business Daily today.

Growth slowed for the reason that rising materials and energy prices led to increasing cost and shrinking profit margin of automakers, said China Association of Automobile Manufacturers (CAAM）in a report yesterday. The vehicles production and sales recorded a monthly drop in July, more significantly in commercial vehicles sector. During the January-July period, China-made vehicles saw growth slow down both in output and sales, posting only 16% increase to 5,932,100 units and 16.66% increase to 5,849,000 units respectively.

Data released by CAAM showed that in the first half, auto industry posted remarkable growth in sales revenue, up 24.95% year on year(y/y) to 638.255 billion yuan, but the growth rate slowed down by 1.63% y/y.

The top 17 out of 19 automakers gained increase in sales revenue for the first half compared to the same period of last year, with 13 growing over 10% and BYD, Sinotruk, Shanxi Auto, Yutong Group and FAW up to 45%. However, Brilliance Auto and Southeast Motor both recorded sales revenue slump by 13.19% and 19.35% respectively.

During the first half, major automakers’ profits totaled 43.447 billion yuan($6.324 billion), up 30.41% y/y, an increase of 10.130 billion yuan but the growth rate slumped by 35.38%, CAAM said.

Most automakers saw a faster increase in total profit over the same period of last year, with Yutong, FAW and BYD rising by 182.61%, 161.16% and 138.87% respectively. But SAIC, Guangzhou Auto, Jianghuai and Hafei recorded profit declines over last year, while Changhe Auto and Southeast were still loss-making carmakers, according to CAAM.

Industry analysts said China’s auto market is still likely to see an increase despite the possible serious situation in the second half.