(Yicai Global) Oct. 15 -- Changan Automobile, which has a China joint venture with Ford, expects it fell into the red in the nine months through September because of a slump in sales. The projected figures point to the carmaker's worst financial performance for the first three quarters of any year since 2002.
The Chongqing-based firm predicts a net loss of between CNY2.4 billion (USD340 million) and CNY2.8 billion, compared with a CNY1.2 billion profit a year earlier, it said in a preliminary earnings report yesterday. For the third quarter, the company expects it lost CNY160 million (USD22.6 million) to CNY560 million. It had a CNY447 million deficit a year ago.
Most automakers in China, the world's biggest car market, have suffered declining sales this year. Total sales fell for a 15th month in a row in September, dropping 5.2 percent from a year earlier, the China Association of Automobile Manufacturers said yesterday. Changan said its sales slid almost 23.6 percent to 1.23 million units in the nine-month period.
Despite the rough ride so far this year, Changan Automobile could bounce back now that its Ford joint venture has finished localized production of luxury marque Lincoln and is likely to roll the first cars off the ramp this year, an analyst who opted to remain anonymous told Yicai Global.
The company's shares [SHE:000625] fell 1.15 percent today to close at CNY7.72 (USD1.09) each. They have gained 17.6 percent so far this year.
Changan Automobile lost CNY2.2 billion in the first half, CNY777 million of which came from its joint venture Changan Ford Automobile, according to its first-half earnings report. Another CNY473 million loss came from a JV with Jiangliang Holdings and CNY246 million was lost at its wholly owned subsidiary Changan Suzuki.
Chinese electric car startup Aiways bought a 50 percent stake in Jiangling for CNY1.7 billion in August, diluting Changan's stake from half to 25 percent and reducing its losses from the investment.
Changan and Ford penned a new cooperative agreement last month to add 18 new cars, including new-energy vehicles, to their China range within the next three years in a bid to boost their JV's market share and profit.
Editors: Dou Shicong, James Boynton