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Major domestic auto parts maker Shanghai Automotive Co., which has A shares listed in Shanghai, said its third-quarter net profit fell 23 percent year on year to 375.3 million yuan (US$45.33 million).
Shanghai Automotive’s core revenue slid 15 percent year on year to 1.53 billion yuan in the same period.
The company said it faced intensifying competition, rising raw material costs and slowing auto industry sales in the first nine months.
In the January-September period, net profits rose 25 percent year on year to 1.81 billion yuan, and revenue climbed 7 percent year on year to 5.71 billion yuan, according to Chinese accounting standards.
A large part of Shanghai Automotive Co.’s profits stem from its joint venture with General Motors Corp. that makes Buick cars in China. Shanghai Automotive holds a 20 percent stake in that venture, while its parent Shanghai Automotive Industry Corp. (Group) holds a 30 percent stake and GM holds the rest.
While that venture helped boost Shanghai Automotive’s profits last year and in the first half, sluggish car sales across China has also started to dampen earnings at the GM joint venture.
GM said recently that said income from its affiliates in China, primarily the joint venture with Shanghai Automotive Industries Corp. (Group), fell to US$80 million in the third quarter from US$142 million a year ago.
After two years of growth that topped 50 percent, China’s auto market has hit the skids.
In September, year-to-year sales dropped 3.6 percent, the first monthly decline this year. Several of China’s best-selling models saw sales drop more than 50 percent in the month from a year earlier, China Association for Automobile Manufacturers said. Although nine-month sales are still up nearly 17 percent from the year-earlier period, momentum has stalled for swaths of the industry.
(Shenzhen Daily October 26, 2004)
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