Motor Vehicles and Parts News
- Auto industry profit grows 46 percent
Date: 8-Feb-2007 Sources: (Shenzhen Daily)
PROFITS of China's automobile industry rose 46 percent in 2006 from a year earlier, the first increase in three years, thanks to substantial growth in the fast-growing car market, the China Daily reported yesterday.
Combined profit of auto parts suppliers, vehicle and motorcycle makers amounted to 76.8 billion yuan (US$9.9 billion) last year, the newspaper said, citing data provided by the China Association of Automobile Manufacturers.
That compared with a 24.3 percent profit fall in 2005, and a 5.2 percent drop the previous year, the newspaper said.
Industry analysts attributed the profit rise last year to a jump in car sales, as automakers rolled out new models at break-neck speed to attract buyers.
'Car price cuts failed to squeeze profits last year as most reductions were on older models,'Song Bingshen, an analyst with CITIC China Securities Co., was quoted by the newspaper as saying.
A total of 5.18 million cars were sold in China in 2006, up 30.02 percent, compared with a 21.4 percent rise in 2005, according to official figures.
However, market growth this year is expected to slow to 15 to 20 percent as fewer new models become available, analysts said.
China, once an easy profit center providing global giants with double-digit margins, has become one of the industry's most intense battlegrounds as Toyota Motor Corp., General Motors Corp. and the likes invest billions of dollars to ramp up capacity.
Still, many industry players, such as Ford Motor Co., had projected continuous strong growth for the year. The U.S. automaker, a relative newcomer in China, saw its sales jump 86.6 percent to 166,722 vehicles in 2006.
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