Dongfeng and Geely see sharp profit gains

PUBLISHED : Thursday, 17 April, 2008, 12:00am
UPDATED : Thursday, 17 April, 2008, 12:00am

Dongfeng Motor Group, the mainland's third-biggest carmaker, and compact-car maker Geely Automobile Holdings delivered positive annual profits yesterday, on strong sales of new models.

Dongfeng Motor said profit last year jumped 81.2 per cent to 3.77 billion yuan (HK$4.21 billion) after the launch of the new Dongfeng Honda CR-V in March last year.

Revenue was 59.32 billion yuan, up 22.9 per cent. The company announced a final dividend of 43.76 fen per share.

Dongfeng Motor, a partner of Japan's Nissan and France's Peugeot Citroen, said it would spend 11 billion yuan this year to upgrade technology and make new energy-saving models.

The company is developing own-brand models and hopes to introduce them in two years.

Geely said profit last year surged 51 per cent to HK$315 million even though sales totalled 181,517 units, short of a targeted 190,000 units. It proposed a final dividend of 1.3 HK cents per share.

Geely said the profit growth was a result of increased sales of more expensive models, such as the 2008 version of its Free Cruise, Vision and King Kong to offset industry price-cuts and rising raw materials costs.

Geely lowered its prices by an average of 5 to 10 per cent in response to a similar move by rival Tianjin FAW Xiali.

Dongfeng Motor chairman Xu Ping said price reductions were unavoidable amid intense competition, compelling carmakers to diversify and sell higher-priced more advanced models.