China’s FAW Xiali engineered a turnaround to race back into the black in the third quarter, buoyed by earnings from a showcase venture with Japan’s Toyota, results posted on Thursday showed, according to Reuters.
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But the firm warned that price cuts in June and September – a result of cut-throat competition in the world’s fastest-growing major car market – could continue to weigh on the bottom line, Reuters noted.
The report said Tianjin FAW Xiali Automobile made a net profit of 116.95 million yuan ($US14.13 million) from July to September compared with a loss of 176.09 million yuan in the year-earlier period, and forecast a continued rise in earnings.
Much of that profit came from its 50%-owned manufacturing joint venture with Toyota which posted a net profit of 793.68 million yuan in the first nine months of 2003 on production of just 36,214 sedans, Reuters said.
In the first nine months, FAW Xiali posted a net profit of 469.37 million yuan compared with a net loss of 582.60 million yuan in the same period of 2002, as sales and output surged on the back of a boom on the domestic car market, the report added.
Reuters said FAW Xiali’s car sales jumped 36.05% year on year to hit 83,984 units in the first three quarters, pushing turnover up 32.4% year on year to 3.97 billion yuan while output surged 49.6% to 94,722 units.
