Chinese Automakers Report Higher Profits
April 16, 2008

On the eve of the opening of the annual Beijing motor show this weekend, two of China’s major automakers, Geely Automobile Holdings Ltd. and Dongfeng Motor Group Co., reported strong 2007 profits, Bloomberg News reported Wednesday.

Geely, China’s largest maker of its own brand models and has no foreign partner, said it doubled profits in the second half of last year, pushing full-year income 51 percent higher. State-owned Dongfeng, which builds vehicles with Honda, Nissan and Peugeot, reported its 2007 net profit rose 81 percent.

Dongfeng: Possible Volvo Truck Link

Dongfeng, China's third-largest automaker by sales volume behind First Automobile Group Corp. and Shanghai Automotive Industry Corp., said its net profit for increased 81 percent for 2007 calendar year while revenue rose 23 percent, Bloomberg reported.

Dongfeng with its partners sold 638,013 vehicles in 2007, up 29 percent from 2006, on the strength of new models that were launched.

Dongfeng has joint production ventures with Honda, Nissan and Peugeot. It is reported to be in talks with Volvo AB to sell a stake in the commercial-vehicle unit of its joint venture with Nissan to the Swedish company.

Geely: Export Aspirations

Geely, known for making $5,000 compacts, doubled its profit in the second half of last year on the strength of its launch of the new the Free Cruiser, Bloomberg reported.

Geely had a net profit of $30 million in the second half of 2007 with sales up 24 percent, according to Bloomberg News. Its full-year profit rose 51 percent and sales rose 8 percent. Geely sold 181,517 vehicles in 2007, a 10 percent rise from 2006 to give the company a 4 percent car market share.

Geely sells cars through four affiliates and introduced a revamped Free Cruiser model, its most popular vehicle, in October after profit fell 32 percent in the first half. The company plans to add five new models a year, including sedans, through 2010. It plans to incrase annual production capacity in China.

Geely has said a target to sell 230,000 vehicles this year, a 27 percent increase from a year earlier, as it adds new models including the five-door hatchback KingKong compact and a 1.8-liter China Dragon sports car based on its Beauty Leopard model. It will also add a 1-liter compact named the Panda in the local market, the automaker said.

Geely, which has had a presence at the Detroit auto show for the past two years, has said it wants to sell vehicles in North America.

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