(Yicai Global) May 28 -- Profit at Chery Automobile crashed 98 percent last year from the year before despite the Chinese vehicle manufacturer selling more cars.

Net profit came to CNY7.37 million (USD1.16 million) last year, according to the Chinese carmaker’s latest financial report released earlier this week. No reasons were given for the sharp drop in profitability.

The company sold 449,000 vehicles in 2020, a 8 percent gain on the year before. Revenue for the period was up 10 percent to CNY34.76 billion (USD5.46 billion), the report said.

The outlook for this year looks better, as the Wuhu, eastern Anhui province-based company’s car sales jumped two-and-a-half times between January and April to 282,000 units. In April, it was the country’s biggest exporter of autos at 22,000 vehicles.

Chery, which is heavily in debt with liabilities of CNY62 billion (USD9.7 billion) at the end of last year, is known for its lower profit margins and cheaper vehicles. Still, it seems there is still a lot of room for improvement. Rival BYD sold less cars than Chery in 2020 at 437,000 units yet earned CNY4.23 billion (USD664.5 million) in profit.

Without the strong performance of its financial arm Chery Huiyin Motor Finance Service, in which Chery holds a 49 percent stake, the automaker would likely have sunk into the red. Chery Huiyin logged profit of CNY773 million (USD121 million) and revenue of CNY2 billion (USD318.7 million) for the year 2020.

Editor: Kim Taylor