Dongfeng sees 5-10 percent sales growth after strong Q1
Updated: 2009-04-16 07:09
By George Ng(HK Edition)
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HONG KONG: Dongfeng Motor Group Company Ltd (DFMG) expects to post a 5 to 10 percent growth in total sales this year despite uncertainties facing the mainland's automobile industry, Chairman Xu Ping said yesterday.
The sales target for the whole year might be revised by mid-year, he said.
Dongfeng Motor expects to achieve higher-than-average growth rates in its production and sales this year after outperforming its peers in the first quarter, Xu said.
The mainland's third largest passenger automaker sold 264,695 vehicles in the first quarter, up 8.86 percent from the fourth quarter of 2008 and well beyond the 3.8 percent sales growth achieved by the mainland auto sector during the first three months of the year.
"We expect to achieve higher-than-average growth rates this year despite uncertainties in the automobile industry," Xu told a press briefing following the group's 2008 results announcement Tuesday.
He said the group has taken "appropriate" measures, including adjustments in product mix, so it could meet market changes and challenges amid a slowdown in the domestic economy.
Dongfeng Motor reported Tuesday a 7.2 percent growth in net profit to 4.04 billion yuan for 2008.
Stripping out a 520 million yuan write-back in deferred tax in its 2007 results, last year's recurring net profit rose 24.3 percent, making the company one of the country's most profitable automakers, the company said in a statement.
Xu cited Dongfeng's diversified product mix as principal factor for growth in last year's earnings. Its robust performance came despite certain unfavorable factors, including the global financial crisis, austerity measures and policy and regulatory changes that have been adopted by the central government, he said.
Revenue in 2008 amounted to 70.57 billion yuan, up 19 percent from the previous year's level. The group last year sold 1.058 million vehicles , up 11.4 percent year-on-year, exceeding the overall auto sector growth rate by 4.7 percentage points.
Passenger cars accounted for the bulk of total sales at 727,000 units, up 14.01 percent from 2007 and outperforming the auto sector growth rate by 6.7 percentage points.
Dongfeng Motor is the mainland's third largest automaker in sales with a market share of 10.8 per cent for passenger cars. It sold 331,000 commercial vehicles last year, up 6.1 percent year-on-year.
The company said overall gross profit margin last year rose 0.3 percent to 16.8 percent. Profit margin at the passenger cars division stood at 19 percent, up 0.7 percentage point.
Xu said Dongfeng expects its gross profit margin this year to be at last year's level.
(HK Edition 04/16/2009 page16)