Profit growth dropped by 35% as China’s major automakers suffered a slowdown in the first half of 2008. Rising materials and energy prices led to increasing cost and shrinking profit margin, according to the China Auto Association.
Vehicle production and sales showed a monthly drop in July, more significantly in commercial vehicles sector. During the January-July period, China-made vehicles saw growth slow down in sales, posting only a 16% increase to around 6 million units. Most automakers saw a faster increase in total profit over the same period of last year, with Yutong, FAW and BYD rising by 182%, 161% and 138% respectively. But SAIC, Guangzhou Auto, Jianghuai and Hafei recorded profit declines over last year, while Changhe Auto and Southeast were still money-losing operations. Industry analysts said China’s auto market is still likely to see an increase despite the possible serious situation in the second half.