China's top 16 automotive groups chalked up a two-thirds increase in first-half combined profits, boosted by buoyant vehicle sales, an industry association said yesterday.
Their post-tax profits totaled 30.2 billion yuan in the first six months, up 65.8 percent from a year ago, according to data from the China Association of Automobile Manufacturers.
The pace slowed slightly from 69.9 percent in the first quarter.
From January to June, Chery Automobile, the No 7 Chinese automaker by sales and partner of Chrysler, posted the fastest profit growth of 210.6 percent of the 16 companies.
Top seller Shanghai Automotive Industry Corp (SAIC), which has tie-ups with General Motors and Volkswagen, saw its profit jump by 48.4 percent.
But the auto association didn't reveal how much Chery and SAIC earned.
SAIC's listed unit, Shanghai Auto, predicted last month that its first-half net profit would more than quadruple from 541 million yuan in the same period of 2006.
The largest auto stock in China by assets is scheduled to announce its interim results on August 21.
Zhu Yiping, an official from the auto association, said the profit hike was mainly due to brisk sales and improved cost-cutting efforts.
Sales of all vehicles made in China grew by 23.3 percent year-on-year to 4.37 million units in the first half, with passenger cars soaring by 26 percent.
Zhang Xin, an auto analyst with Guotai & Jun'an Securities Co, said strong profit growth should also be attributed to vehicle producers' investments in the booming domestic capital market, where the Shanghai Composite Index has surged by 70 percent so far this year.
"Many automakers are buying stocks and funds, which will continue to help them boost profits significantly in the second half of this year," Zhang told China Daily.
He predicted that the combined profits of the 16 automotive groups would climb by 50 to 60 percent this year from 2006.
The core business turnover of the 16 groups rose by 26.6 percent to 486.4 billion yuan in the first six months of this year, according to data.
Source: China Daily