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SCMP Reporter

Qingling Motors Co expects sales to rise 17 per cent this year because of an increase in output and a change in product mix.

 Analysts caution that profit contribution of its soon-to-be launched TFR pick-up trucks will be minimal this year. Its earnings growth will hinge on domestic content and the change in the yen's exchange rate.

 Chairman Wu Yun said the company's net profit would post an 'obvious' growth, following a 140 per cent rise to 426.28 million yuan (about HK$395.97 million) last year.

 He said Qingling would focus on expanding the product range of its 100P light duty trucks of the N series and exploring the market for TFR trucks that would officially be launched later this year.

 This year, the H-share company plans to raise production 4 to 10 per cent to 36,000 to 38,000 units. About 6,000 will be TFR trucks. It sold only 1,000 units last year.

 The rest is for 100P, including 6,000 for single row trucks and 24,000 for double row trucks.

 Mr Wu said as TFR trucks carried a higher selling price, it would lift the company's sales, and their profitability would not be lower than that of 100P when the model change was completed next year.

 Domestic content for TFR trucks would be at least 65 per cent next year, compared with 75 to 80 per cent for 100P.

 This year, Qingling has lowered ex-factory price for TFR trucks to 135,000 yuan from 155,000 yuan as it aims to capture a larger market share. Its 100P remains at about 120,000 yuan.

 Last year, Qingling recorded a gross profit margin of about 16 per cent.

  Dresdner Kleinwort Benson head of China research Ann Shih expected Qingling's net profit to add 19 per cent to 507 million yuan this year.



Qingling Motor sales to lift 17pc with product and output change