China Automotive Systems (CAAS) has unveiled first quarter net sales down 7% to US$84.5m and gross profit off from US$20m to US$16m, as the company reports falling domestic demand and rising fuel costs.
Despite the home slowdown, the supplier was able to increase sales to Chrysler North America, while the appreciation of the RMB currency versus the US dollar partially offset lower unit sales of passenger vehicle steering products in China.
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The manufacturer says the net sales decline was mainly due to slow sales of the PRC domestic branded passenger vehicles and buyers deferring purchases due to rising fuel prices.
China Automotive added gross margin was 19%, compared to 22% in the same quarter in 2011, mainly due to sales price declines and unit cost increases resulting from rising labour costs.
“During the first quarter, the PRC domestic passenger vehicle brands sold approximately 712,000 units, a year over year decline of 15%,” said CAAS CEO, Qizhou Wu. “On the commercial vehicle front, PRC truck sales continued to experience double-digit percentage declines due to fewer infrastructure projects and the slowed real estate market.
“As the largest supplier to many large domestic OEMs, we took hits from both sectors. While we are waiting for conditions to improve in the PRC, we are rapidly expanding our sales in North America and planning for expansions in emerging markets.
“Our shipments to North America, mainly to Chrysler, rose 86% from same period of 2011. We also recently announced our joint venture in Brazil, another large market currently dominated by European steering producers. Our financial standing remains solid, as we generated strong cash-flow in the first quarter.”
