Chinese Automakers' Profits Soar
May 30, 2007

The Chinese government reported auto industry profits in the country soared 70 percent in the first three months of this year compared with last year.

The country's major automakers had a combined profit equivalent to $1.7 billion (U.S.) in the first quarter, jumping by 69.9 percent from a year before, the country’s Ministry of Commerce announced in Beijing Tuesday.

Interestingly, while Chinese automakers -- and there are many of them -- cumulatively made $1.7 billion in the quarter, the three U.S. automakers combined lost about $1.9 billion.

Geely Automobile Holdings Ltd., Chery Automobile Co. Ltd. and China National Heavy Duty Truck Group (Sinotruck) made the largest contributions to the industry's growth. Geely reported profits 30 times more than the year-ago quarter; Chery’s profits were more than four times last year’s; and Sinotruck had six times last year’s earnings.

All three have aggressive global plans. Geely and Chery want to sell vehicles in the U.S. and Europe. Chery currently is in talks with Chrysler to jointly produce a small car built in China for export to Europe and North America. Sinotruck is expanding capacity to export a third of its production by 2010.

According to the China Association of Automobile Manufacturers figured published by Shanghai Daily:

* Geely reported almost 30 times profit growth in the period on a yearly basis. It sold 51,135 cars in the three months, up 5.6 percent from a year earlier, and equivalent to 21 percent of its annual sales target. This year, Geely said it aims to sell 240,000 cars under the Geely and Maple brands.

* Chery, the nation's fourth-largest automaker, reported 4.1 times of net profit in the first three months of the year. Chery had a target to sell 400,000 units this year after it sold 300,000 units last year, a 60 percent jump from a year ago. Earlier this month, Chery launched a 1.3-liter A1 compact car, with a starting price around $7,000. Chery plans to sell 8,000 A1 cars this year.

* Sinotruck, the country's largest maker of trucks bigger than 14 tons, sextupled its net profit in the period. The Chinese partner of Volvo AB is doubling capacity to 125,000 heavy-duty trucks by 2010; a third of those will be exported.

In the U.S., General Motors earned $950 million in the same quarter, Ford made $219 million and Chrysler lost $2.02 billion (which included $1.24 billion for its restructuring plan kicked off in February).

Posted by Michelle Krebs at 5:01 AM under Chrysler , Companies , Ford , GM , News | Comments (0) | digg this | Seed Newsvine