FAW Car has released recently half year fiscal report that revenue dropped 13.39 percent from a year earlier to 13.8 billion yuan in the first half. Net income attributed to the shareholders of listed companies slumped 48 percent from the same period of last year to 164 million yuan, and net profits belong to the shareholders of listed companies excluding non-recurring profit and loss was 150 million yuan, down 51.75 percent from a year earlier.

According to the explanation of the company, the decline in profits is contributed by various factors including the slowing the domestic auto industry sales growth, all major auto companies launching new products, bout-after-bout price reduction wars, and increasing competition in the industry. The business environment is becoming increasingly grim.

Previously, FAW Car announced first-half sales figures, which show all the models experienced sales slump in the first half. The company's cumulative production in the first half was 125,000 units, down 11 percent compared with the same period of last year; cumulative sales of 121,000 units, down by 11.6 percent on a yer-on-year basis. The car production was 99,000 units, a 13.1 percent decrease from a year earlier, with 87,000 units sold, falling by 10% on a year-on-year basis. SUV production was 37,000 units, dropping by 5.1 percent compared with the same period of last year, with 32,000 cars sold, sales falling 12.4 percent form a year earlier. The company produced 1,982 unis MPV, down 17.3 percent from last year, selling 984 vehicles, sales declining 61.4 percent than last year.

Insiders hold that passenger vehicle sales are slowing down and the development strategy of FAW Car fails, which are the main reasons leading to FAW’s sharp fall in half year net profit.

Source: gasgoo