Chinese own brand manufacturers see net profits fall in first half of 2012

Performance reviews reveal that the first half of the year has been especially tough for domestic Chinese own brand manufacturers. According to a report appearing in the Securities Daily today, the majority of own brands announcing negative growth in their net profits for the first half of the year, with FAW Car going as far as reporting a 75 million yuan ($119.07m) deficit, equivalent to a year-on-year decrease of over 35 percent.

According to statistics from the China Association of Automobile Manufacturers (CAAM), a total of 3.15 million own brand passenger automobiles were sold in the first half of the year, .16 percent less than a year ago. Own brand manufacturers controlled 41.39 percent of the market, falling three percent points from 2011. Among them, own brand sedan sales totaled 1.42 million units, falling a full 6.8 percent from the previous year.

Despite own brands having made several significant advancements over the past few months, the CAAM maintains that a large gap exists between them and Sino-foreign joint ventures. Combined with increased competition in the market overall, own brands have failed to perform ideally.

With the exception of FAW Xiali, China's nine publicly listed passenger automobile manufacturers all announced falls in their net profits for the first half of the year. Commercial vehicle manufacturers have not been immune to the market either, with Jiangling, Ankai, Dongfeng and Haima's commercial vehicle divisions witnessing net profit falls of 24 percent, 48 percent, 70 percent and 98 percent respectively.

On the bright side, exports of Chinese brand vehicles have noticeably increased in the first half of 2012. According to CAAM statistics, a total of 487,900 vehicles were exported during the six month period, growing 28 percent from last year. Monthly exports in May and June both exceeded 100,000 units. CAAM Executive Vice Chairman and Secretary General Dong Yang has previously said that he predicts that Chinese automobile exports will exceed one million units this year, expecting overall growth to be between 25 percent and 30 percent.