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Shenyang Jinbei Automobile Co Ltd, the Chinese vehicle producer listed in Shanghai, on Friday reported a net loss during the first half of this year due to sluggish sales.
The company's first-half net loss totalled 87.58 million yuan (US$10.58 million).
The figure was compared with a net profit of 76.36 million (US$9.22 million) in the first six months of last year.
Jinbei Automobile blamed the loss on decline in its sales as a result of China's macroeconomic controls.
The company's former vehicle venture with General Motors (GM) in Shenyang in Northeast China's Liaoning Province, lost 954.8 million yuan (US$115 million) in the first half of this year, generating a deficit 238.7 million yuan (US$28.8 million) for Jinbei Automobile based on its 25 percent stake in the venture, it said in a statement.
The joint venture, which started operations in 1999, halted production of Chevrolet Blazer sport utility vehicles and picked up trucks in March this year.
Jinbei Automobile sold all of its stake to the Shanghai Automotive Industry Corp (SAIC), GM's major Chinese joint venture partner, after this was approved by the government last month.
Jinbei GM's operations will be integrated into the joint venture between SAIC and GM based in Shanghai, or Shanghai GM.
Shanghai GM will transfer production of the Buick GL8 commercial wagon to Jinbei GM, which has been renamed SGM Beisheng Automobile Co Ltd, at the end of September this year.
SGM Beisheng has a planned annual production capacity of 100,000 vehicles.
Jinbei Automobile also said that it lost 22.5 million yuan (US$2.7 million) on its joint venture with the overseas-listed Brilliance Auto China during the first half of this year.
The joint venture, in which Jinbei Automobile and Brilliance control 49 and 51 percent stakes respectively, reported a loss of 46 million yuan (US$5.5 million) during the period, compared with profits of 412 million yuan (US$49.8 million) a year earlier.
The joint venture manufactures Hiace vans and Granse multi-purpose vehicles under licence from Japan's Toyota Motor Corp and Zhonghua sedans.
The venture sold 32,164 vans in the first half of this year, down from 34,694 units a year earlier, Jinbei Automobile said.
Meanwhile, it sold 9,185 Zhonghua cars, down from 18,058 units.
Jinbei Automobile estimated that it will continue to be in the red during the third quarter of this year.
Analysts say that Jinbei Automobile's dormant sales mainly resulted from the lack of competitive products amid red-hot fights in China's vehicle market, instead of the government's macroeconomic controls.
Sales of the Zhonghua sedan are unlikely to rebound during the second half of this year because there are so many strong players in the segment, analysts say.
(China Daily August 21, 2004)
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