Qingling Motors has clinched six deals to source production of components and spare parts from shareholders on a continuing basis at a cost of 394 million yuan (about HK$366 million) this year. Last year, the Chongqing-based firm, which makes Isuzu light-duty trucks, paid about 400 million yuan for similar purchases. Company officials said that while the money spent was about the same, the average production costs would be lower, as more cars would be manufactured this year. They said the deals reflected attempts to lower production costs through higher local content. Of the six transactions, five are in place. The earliest took effect last October and the last is due to take effect this October. Most components were bought from mainland manufacturing ventures jointly operated by parent Qingling Motors (Group) Co, which has a 51 per cent stake in H-share Qingling Motors, and Isuzu Motors, which holds 14.9 per cent. The deals, which are connected transactions, were struck on 'normal commercial terms', chairman Wu Yun said. To cash in on last year's success with car sales, Mr Wu said Qingling planned to sell 40,000 light-duty trucks this year, up 11.1 per cent from 36,002 last year. This was despite a nation-wide slump in car sales. The H share he said had not been affected by the downturn in the sector, due to improvements in checking production costs and the successful launch of new T-series models. Last year, net profit grew 23.2 per cent to 524.6 million yuan. The company has also maintained car prices amid price-cutting campaigns in mainland sedans. Its 100P light-duty trucks of the N series retail for 123,000 yuan on average, while the new T-series are sold for 128,000 yuan each. In the first quarter of the year, it sold 8,100 trucks, up 6 per cent. The company is expected to increase its market share to 31 per cent from 28 per cent this year, Mr Wu said.