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Automobile profit growth dropped in 2004
Last Updated(Beijing Time):2005-02-03 15:38

China's automobile industry in 2004 achieved a profit of 70 billion yuan, or 8.5 billion US dollars, according to the report issued by China Machinery Industry Federation. But the profit growth rate dropped 8-percentage point compared to the figure of the previous year.

The automobile industry made a total production of over 1 trillion yuan, or 121 billion US dollars in 2004. This is an increase of 21 billion US dollars from the previous year. The total output amounted 5 million vehicles, up 15 percent from 2003. The profits reached 8.5 billion US dollars, but the profit growth dropped 8-percentage point.

Experts say the profit reduction is attributed to two reasons. The price rise of raw material raised the production cost by 10 to 15 %. At the same time, the competition pushed the sales price down by 11 %.

Zhang Xiaoyu, the Vice Chairman of China Machinery Industry Federation, said, "At the time when the raw material price went up but the automobile price down, our profit growth just dropped 8 percentage point. This is not easy."

Experts estimate that China's automobile industry will continue to grow in 2005 and production growth will maintain at 15 to 20 %. The automobiles produced will reach 5.6 to 5.8 million vehicles.

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