According to the state-owned China Daily, the country’s auto sector saw profits drop by more than half in the first four months of this year.
Compared to a year earlier, profits between January and the end of April dropped 57% due to slow sales and rising costs.
The vehicle-making segment of the industry reported a 74% on-year plunge in profits in the first four months of the year, to 4.36 billion yuan ($528 million US), the newspaper reported.
Industry-wide profits, which include vehicles, engines, auto parts and motorcycles, totalled 12 billion yuan ($1.5 billion US), the report said, citing data from the China Association of Automobile Manufacturers.
Falling car prices and rising costs for steel and rubber have hurt profits, compounded by slowing growth in sales and a shift away from higher-margin luxury and full-size vehicles and toward economy models.
The report didn’t specify if the figures were before or after taxes.
Profit margins in the sector fell to an average of less than 4%, from about 9% last year.
In 2004, China’s auto sector reported total profits of 72 billion yuan ($8.7 billion US), a 6% fall from the year before, the report said.
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