Major Chinese car maker Chongqing Changan Automobile Co yesterday reported a 28-percent profit increase for 2007, mainly thanks to growing sales of its Ford Focus compacts.
The Chinese partner of Ford Motor Co and Mazda Motor Corp, China's fourth-largest auto maker, sealed a net profit of 666.9 million yuan (US$94.9 million) last year, up from 519.4 million yuan in 2006.
Revenue increased 12 percent to 13.7 billion yuan, said Changan Auto in its annual report filed to the Shenzhen Stock Exchange. Earnings per share rose from 0.27 yuan to 0.34 yuan.
The Chongqing-based auto maker attributed much of its growth to its Changan Ford Mazda Motor Co, which led Changan's other five subsidiaries with a 1.9-billion-yuan profit in 2007.
Changan Auto has benefited from expansion by its American partner Ford, which hopes to sell more cars in emerging markets to compensate for slowing United States demand, industry analysts said.
However, 2007 net profit for Changan Suzuki dropped from a year earlier because of reduced sales of 3,900 vehicles. Changan Ford Mazda Engine and Nanjing Changan are still in deficit.
In spite of a general growth, Changan underperformed market expectations, said analyst Li Chunbo of Citic Securities. "Although its profit growth figure is good, Changan was held back by losses at Changan Ford Mazda Engine Co and Nanjing Changan Automobile Co, both of which should see smaller losses - or even profit - for 2008," Li said. The two subsidiaries began operating last year.
(Shanghai Daily March 27, 2008)
