Brilliance aims for turnaround
Brilliance China Automotive Holdings, which has made a loss for two years, will turn a profit in the second quarter on strong sales of self-branded Zhonghua sedans and BMW cars, according to chairman Wu Xiaoan.
The carmaker met 42 per cent of this year's total sales target of 210,000 units in the first five months as its Zhonghua sedan attracted 50,000 buyers, a jump of 263 per cent year on year, Mr Wu said.
'We're confident the company will return to profit this year,' he said.
Former Dalian City mayor Qi Yumin was brought in last year to help the Liaoning-based Brilliance China emerge from a period of management turmoil and falling sales.
The provincial government until then had been running the firm after founder Yang Rong fled to the United States in 2002 denying accusations of committing economic crimes.
Brilliance China's loss narrowed to 398.4 million yuan last year from 649.6 million yuan in 2005 as sales jumped 92 per cent to 10.5 billion yuan.
Its shares closed 1.93 per cent higher at HK$2.11 yesterday after surging about 126 per cent in the past 12 months.
The company plans to continue its revival by saving one billion yuan through cost controls this year.
To meet demand strengthened by the country's booming economy, Brilliance China and partner Bayerische Motoren Werke are to spend 20 million yuan to raise production capacity for middle to high-end cars to 50,000 units from 30,000.
The two companies are discussing further expansion and hope to reach agreement and fix details in two to three months. Brilliance China and BMW had a 25 per cent market share of the medium to high-end car market in the country at the end of last year.
President Liu Zhigang said the company hoped its medium to high-end cars could be the No1 national brand in five years.
The company sold 13,500 BMW cars in the first five months, up 67 per cent from a year earlier.
Brilliance China has also raised its profile in Europe by being the only mainland exhibitor at the Geneva car show in March, where it presented three models under the Zhonghua series - BC3, Zhonghua Zunchi M1 and Junjie M2.
Despite the progress, the Zhonghua Zunchi M1, known as BS6 in Europe, has failed to pass a benchmark German test, the German ADAC car club said yesterday.
That followed the failure of the Landwind model from Jiangling Motors two years ago.
The BS6 model received only one out of five possible stars in the crash test under the European New Car Assessment Programme regulations, said ADAC spokesman Maximilian Maurer.
Strong sales of Zhonghua cars lift Brilliance after losses in past two years
Brilliance China's total vehicle sales target for the year, in units: 210,000