China's FAW Xiali Auto sees Jan.-Sept. net falling 50%-100%
Last Update: 6:55 AM ET Oct 10, 2007Print E-mail Subscribe to RSS Disable Live Quotes
BEIJING (MarketWatch) -- Chinese compact-car maker Tianjin FAW Xiali said Wednesday it expects its January-September net profit to plunge between 50% and 100% from a year earlier due to severe competition in the local economy car market.
FAW Xiali's forecast follows the dismal performance so far this year of the economy car sector, as the country's growing wealthy classes eschew smaller cars in favor of mid-sized and luxury models.
Based on the forecast, FAW Xiali may have earned at most CNY0.097 a share, according to a Dow Jones Newswires calculation. At worst, its entire profit may have disappeared during the three quarters, compared with net earnings of CNY0.193 a share in the year-earlier period. Net profit in the January-September period last year was CNY307.5 million.
The company has already seen its first half net profit slide 40% from a year earlier.
FAW Xiali is scheduled to issue its third-quarter earnings Oct. 29. The company, along with its controlling shareholder China FAW Group Corp., has a joint venture with Japan's Toyota Motor Corp. (TM:toyota motor corp sp a
Sales in China's subcompact market, where FAW Xiali's main products - Xiali N3, Vizi, Vela, and Weizhi; priced at CNY32,000 to CNY68,000 - are positioned, only grew 3% during the seven months to end-July, according to data from Automotive Resources Asia Ltd., a division of J.D. Power and Associates.