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Auto industry profits face inevitable decline
(Xinhua)
Updated: 2004-07-30 09:45

With continuous falling production and sales volume, dropping car prices, and increased stock in recent months compared with the same period last year, the profits of auto enterprises in China will decrease inevitably.

Zhang Xiaoyu, vice chairman of the China Machinery Industry Federation (CMIF), made the remarks here Thursday at a press conference.

The substantial profit decrease of the auto industry had become the main cause for the moderate profit decline of the whole machinery industry, he said.

According to CMIF statistics, the auto industry made a profit of 44.336 billion yuan (US$5.36 billion) in the first six months, up 13.68 percent over the same period last year. The growth rate dropped 90.31 percentage points year on year.

The output of motor vehicles hit 2,744,500 in the first six months with 1,247,800 cars, rising by 26.93 percent and 34.25 percent respectively compared to the same period of last year.

Zhang said the auto producers and sellers often stock motor vehicles for a week in the marketing seasons, but current stocks of some automobiles are tied up for two or three weeks. This imposes huge pressure on both producers and sellers.

The situation will be improved in the second half of this year, for the auto producers would have to reduce yields, adjust the product structure and lower the prices of old-fashioned products, he said.

As for the whole year, Zhang said, since the output of automobiles has reached or surpassed half of the goal scheduled for this year in the first six months, auto production and sales volume would rise 20 percent year on year, and the output of automobiles would be over 5 million.

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