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Profit falls 34% last year at Dongfeng

DONGFENG Automobile Co reported its net profit fell 34 percent last year, blaming weak demand for its commercial vehicles amid the economic slowdown.

The nation's second-largest commercial vehicle maker said income slid to 315 million yuan (US$46 million) last year, according to a statement filed to the Shanghai Stock Exchange yesterday.

Its sales revenue, however, rose 14.8 percent to 12 billion yuan after selling 170,717 vehicles, an increase of 13.78 percent from a year earlier.

Dongfeng said China's commercial vehicle market has been greatly affected by the global financial crisis. Declining exports and surging raw material prices hurt the firm's performance.

Hubei Province-based Dongfeng is the partner of Japan's Nissan Motor Corp, making Nissan-branded pickups and sport utility vehicles, as well as light commercial vehicles under its own brand.

China's vehicle sales rose 6.7 percent last year to 9.38 million units, the lowest growth in a decade. Passenger car sales gained 7.27 percent to 6.75 million units.

Commercial vehicle sales rose 5.25 percent to 2.62 million units. The growth rate was 17 percentage points slower than the same period a year earlier.

The company expects domestic sales for commercial vehicles will continue to fluctuate as economic growth may continue to slow. The light commercial vehicle market will also get hurt when higher emission standards on pickups increase production costs.

Dongfeng said it would focus on expansion in rural areas this year to help sales after China introduced a stimulus package to spur demand in rural regions.

The company also aims to boost sales through launching new products, technological innovation and expansion in overseas markets.


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