Dongfeng profit down 10%
Published on August 31, 2011 by Tycho de Feijter
Chinese auto maker Dongfeng Motor Group Co said Tuesday its first-half profit fell 10% from a year earlier, dragged by slower growth of automobile sales as well as intensifying competition, the Wall Street Journal reported.
Earnings for the six months ended June 30 was 5.86 billion yuan ($914.6 million), down from 6.53 billion yuan a year earlier. The company booked a 292 million yuan gain from the disposal of a 25.23% stake in Dongfeng Dana Axle Co in February.
Revenue rose 3% to 63.71 billion yuan from 61.85 billion yuan.
Dongfeng Motor is the main listed unit of state-owned Dongfeng Motor Corp, China’s third-largest auto maker by sales volume after SAIC Motor Corp and FAW Group Corp Apart from having a joint venture with Nissan Motor, it also has joint production ventures with Honda Motor Co and Peugeot SA.
The Chinese car maker said it sold 1.06 million vehicles in the first half, up 9.5% from a year earlier. However, gross profit margin for its passenger vehicle division fell 3.6 percentage points to around 21.9% from 25.5% a year earlier, because of pressure to cut prices.
Based on monthly sales figures, passenger cars accounted for 73% of its total first-half sales, with commercial vehicles accounting for the rest. It omitted a first-half dividend, just as it did last year.