Beijing, China, 8 Feb – The profit of companies in the Chinese automotive sector rose 46 percent in 2006, driven by strong sales after declines in the previous two years, Chinese newspaper China Daily reported Wednesday.
Combined profit of all companies in the sector totaled 76.8 billion renminbi, according to figures from the Chinese Association of Car Manufacturers published in the paper.
In 2005, car industry profits fell 24.3 percent, maintaining the trend begun in 2004 when there was a fall of 5.2 percent.
Analysts cited by the Chinese press said that the rise in profits in 2006 was due to strong sales and the launch of a record number of new models.
“Car manufacturers launched many new products which contributed significantly to sales,” said Song Bingshen, an analyst for CITIC China Securities told China Daily.
In 2006 China overtook Japan to become the largest car market, having sold 7.22 million vehicles in China, of 25 percent more than in 2005.
This year sector analysts expect profits rises to slow due to a fall in sales and greatly reduced prices caused by heavy competition between Chinese manufacturers. (macauhub)