China Automotive Systems (CAAS), a power steering components and systems supplier in China, said second quarter net sales fell 15.9% year on year to US$105.7m from $125.8m in the second quarter of 2018.

Gross profit declined 10.8% to $15.2m and the gross margin increased to 14.4% from 13.5% in the second quarter of 2018.

Income from operations increased 369.2% to $2.7m with an operating margin of 2.6% compared with $0.6m and 0.5% in the second quarter of 2018.

Net income increased to $2.5m or earnings per share of $0.08, compared to $0.8m, or $0.03, in the second quarter of 2018.

First half sales decreased 17.3% to $214.9m, compared to $259.8m in the first six months of 2018.

Gross profit decreased to $29.2m, compared to $38.7m in the first six months of 2018; gross margin decreased to 13.6% in the first six months of 2019, compared to 14.9% in the first six months of 2018; income from operations decreased to $3.8m from $5.2m with an operating margin of 1.8% compared with 2.0% in the second quarter of 2018; net income was $4.0m compared to $5.2m in the first six months of 2018; earnings per share was $0.13, compared to earnings per share of $0.16 in the first six months of 2018.

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Qizhou Wu, CEO of CAAS, said: "Our sales in the second quarter of 2019 reflected the slowing economy in China and softer consumer spending. As a leading supplier of steering products to the Chinese automobile market, our sales are affected by the performance of the OEM market.

"Automobile production has been disrupted by a pre-buy of less expensive National V-compliant vehicles before the stricter National VI emission standards are nationally implemented. Chinese-branded passenger vehicle sales declined by 27.9% year-over-year in April 2019 followed by a decline in May 2019 of 28.1% year-over-year.

"We anticipate that our new product development with Hyoseong Electric to sell electric motors for electric power steering systems, and a new development programme for a recirculating-ball steering system with a major client's autonomous vehicle development, will offer new growth opportunities for the future."

Management revised revenue guidance for the full year 2019 to $430m from US$510m.