FAW Car's Net Profit in the First Half of the Year Drops 50% YoY

FAW Cars released its first-half financial report last Wednesday, which showed that the company's total vehicle sales increased by 28.88% year-on-year in the first half of the year, but due to the increase in sales expenses, the net profit attributable to shareholders of listed companies decreased by 49.63% year-on-year.

According to the data, thanks to the release of new car sales such as the Pentium X80 and Pentium B70, FAW Car sold more than 130,000 vehicles in the first half of the year, an increase of 28.88% over the same period of last year, and operating revenue increased 18.24% year-on-year. Although the sales of products and operating income have increased significantly, the net profit of the company in the first half of the year was only 316 million yuan, a decrease of 49.63% year-on-year. FAW Car believes that in the first half of the year, the company increased product promotion efforts and sales expenses increased accordingly; at the same time, the sales structure of some products changed, resulting in a decrease in profits during the reporting period compared with the same period of last year.

In contrast, FAW Xiali, another listed company of FAW, is even more severe. According to statistics, FAW Xiali achieved sales of 37,300 vehicles in the first half of the year, a decrease of 47.85% year-on-year; net profit attributable to shareholders of the parent company was RMB -436 million. Since 2012, FAW Xiali's production and sales have dropped sharply for two consecutive years, and profitability has also been directly affected.

According to statistics, the cumulative sales volume of FAW Xiali in the first half of the year was 37,301 units, which was 47.8% lower than last year's 71,526 units. Among them, from January to June this year, sales of the Xiali series were 30,437, and the Wei series was only 6,864. FAW Xiali believes that the company’s overall sales decline, and the company’s share of the Tianjin FAW Toyota Motor Co., Ltd. production and sales fell year-on-year, is the main reason for the company’s loss in the first half. After more than two years of product structure adjustment, Tianjin FAW launched a brand new Junpai on the basis of the existing Xiali and Weizhi product lines at the beginning of this year. Jun sent the first product Chun D60 will also be listed in the second half.