China’s FAW Car has reported net profit for 2006 up 2.9% year on year after cutting prices to meet increased competition.

The growth rate was down from 8% in 2005, Reuters said .FAW net profit for the year ended 31 December, 2006, was $US44.88m (347.40m yuan), up from 337.62m yuan the year before.

Revenue for 2006 fell 3.6% to $US1.29bn (9.96bn yuan), in unaudited results compiled under domestic accounting standards. Reuters noted that the company will release final results on 30 April.

FAW is a unit of one of China’s three largest automakers, First Automotive Works, and makes the Red Flag cars favoured by Communist Party cadres as well as the Mazda 6 sedan.