SHARES of Tianjin FAW Xiali Automobile Co, the Chinese maker of US$4,000 compacts, plunged by as much as the daily limit on the Shenzhen stock market after saying third-quarter profit probably fell by at least half.

The car maker declined 7.8 percent to 14.49 yuan at 11:02am, after earlier slipping as much as 10 percent. Third-quarter profit probably dropped by between 50 percent and 100 percent, the company said in a statement late yesterday.

FAW Xiali and other Chinese car makers have cut prices due to increasing competition in the world's second-largest auto market. Sales of cheaper compacts have also declined as drivers use stock market gains to buy more expensive models.