By Hao Zhou (chinadaily.com.cn)
Updated: 2007-08-28 17:47

Most listed automakers have reported better-than-expected first-half results, and some agencies said that the market for passenger vehicles may grow by 15 to 20 percent annually in the next decade, Guangzhou Daily reported.

Domestic automobile manufacturers, such as Shanghai Auto, Tianjin FAW Xiali, and Changan Auto, with the exception of FAW Car, have released their interim reports.

Shanghai Auto predicted on July 7 that it expects a potential triple increase in net profit. Nonetheless, the half-year report revealed the domestic auto giant's net profit amounted to 2.72 billion yuan (US$360 million), up 359 percent from 592 million yuan a year before, topping China's auto manufacturers.

Following the acquisition of 20 billion yuan worth assets from other parts of its parent Shanghai Automotive Industry Corp through private placement, Shanghai Auto's focus has shifted to producing complete vehicles. Currently, its overall assets have reached 85.59 billion yuan.

Meanwhile, Haima Investment Group forecast a year-on-year 627 percent growth of first-half net profit, beating expectations by four to five times. Of the total revenue, Haima Automobile alone contributed 94 percent.

At the end of last year, Haima Investment Group purchased a 50 percent stake in FAW Haima Automobile and the whole of Shanghai Haima Automotive Research and Development Co Ltd through private placement, which formed a complete industry chain from research to manufacture and sale for the company.

Foton, the largest commercial vehicles producer in China, also recorded a six-fold increase in profits, lifted by the sales of its major heavy truck model, the Auman.

Encouraged by explosive growth, CITIC Securities issued a research report, in which it claimed the passenger cars market will maintain rapid growth for 20 years based on a traveling conditions upgrade, and the annual growth rate could be 15 to 20 percent over the next 10 years.

As the national highway network is constructed and rural roads improve, the number of private passenger cars is estimated to surge to 120 million units from last year's 15 million, according to CITIC Securities. It also predicted China will produce and sell a total 18 million cars annually by 2015, with half of the market occupied by Chinese own brands.

In the next five to 10 years, China's leading automakers are expected to maintain an annual 30 percent growth on average, and several of them will become global mainstream automakers, CITIC Securities forecast.

However, the market for small-displacement vehicles is declining as profits were pressed. In the first two quarters, FAW Xiali reported a net profit of 116 million yuan, sharply down 40.3 percent year-on-year. Its core business revenue dropped 13.5 percent from a year ago. Geely also suffered a five percent drop in profits.

Changan Auto's net profit climbed 27.69 percent year-on-year, supported by its Changan Ford Mazda's medium- and high-end models such as the Mondeo, Focus, and Volvo S40, which contributed 53.784 percent to the sedan sales increase. By contrast, Changan's sales of mini cars, which was previously its core business, only went up 6.74 percent.