Qingling Motors, which makes Isuzu light trucks, has shifted into reverse gear with a 19.35 per cent fall in net profit to 202.86 million yuan (about HK$189.24 million) in the first half to June 30. Operating profit for the H share dropped 19.39 per cent to 266.66 million yuan while turnover fell 15.11 per cent year on year to 1.71 billion yuan. The company manufactured and sold about 17,600 light trucks in the period, up about 1 per cent over the previous period, capturing about a 30 per cent share of the market segment in the mainland. Diluted earnings per share were 8.77 fen, down from 10.58 fen. No interim dividend was proposed. Chairman and general manager Wu Yun said the expiry of a preferential treatment in value-added tax was the main reason for the fall. He said the mainland's car industry was facing sluggish demand and keen competition. The firm reported a 4 per cent slide in after-tax profit to two billion yuan in the first half, despite an 8 per cent surge in production to 890,000 units and a 5.1 per cent increase in sales to 850,000 units. Mr Wu said the firm had controlled the cost of imported components, which accounted for less than half the total costs. Early purchase of imported components to prevent supply disruption caused by flooding helped the firm avoid yen appreciation, he said. The company booked a foreign exchange gain of about 31 million yuan in the first half. It has received orders for 38,000 vehicles this year, 15,000 of which are for the new T series of light trucks and multi-purpose vehicles. The new models commanded a gross profit margin of about 23 per cent in the first half. The old 100P series yielded a gross profit margin of 21 per cent, down from 25 per cent in the year-ago period.