FAW Car reports net deficit in first half of 2012

Gasgoo.com (Shanghai July 31) - In the light of recent accusations of intellectual property infringement by VW, FAW Group has officially released sales figures for its own brand FAW Car. Looking at the figures, the own brand's performance over the first half of the year leaves much to be desired.

In a Caijing report appearing today, FAW Car's announced that it suffered a deficit of 45 million yuan ($7.13m) over the first two quarters of the year. By comparison, the manufacturer reported a net profit of 800 million yuan ($123.64m) in the first half of 2011. FAW attributes the drop in profits to falling sales, declining profit margins and increasing costs. It is worth noting that FAW Car ran a deficit of 537 million yuan ($84.84m) in the fourth quarter of last year.

Sales of the own brand's flagship model, the Besturn B50 (pictured), totaled just 37,000 units over the first six months. 46 percent less than the 70,000 units sold a year ago. The car's share in the compact market fell from 2.6 percent last year to just 1.7 percent. The slightly more upscale Besturn B70 also failed to perform well.