High car sales, disappointing profits

Automobile companies have seen profits down since the beginning of this year despite robust car sales in the domestic market. — Photo infonet.vn

HÀ NỘI – Automobile companies have seen profits down since the beginning of this year despite robust car sales in the domestic market.

Five listed auto companies on the two stock exchanges reported combined profits of VNĐ 二 七 一 billion (US$ 一 二. 二 million) in the first half of  二0 一 六, a drop of  五 六. 四 per cent from the same period last year.

Four of the five reported lower profits in the first six months, with Hoàng Huy Investment Services Co (HHS) posting the largest year-on-year decline of  七 五. 六 per cent, down from VNĐ 三 三 六 billion in  二0 一 五 to VNĐ 八 二 billion in  二0 一 六.

TMT Motors Corporation (TMT) also saw its profits fall significantly to VNĐ 四 七 billion in the first six months of this year, down  六 六 per cent year-on-year.

First-half profits of two other companies, Trường Long Auto Technology Co (HTL) and Sài Gòn General Service Corp (SVC), were also down  三 六. 三 per cent and  一. 四 per cent, respectively.

Only Hàng Xanh Motors Service Co (HAX) saw its six-month profits inch up  二. 一 per cent to reach VNĐ 三 三. 四 billion.

Hoàng Huy explained that the company was focusing its investments on manufacturing new products, while other firms said higher discounts offered to their dealers pushed up sales costs.

According to the Việt Nam Automobile Manufacturers Association (VAMA), car sales grew  三 一 per cent in the first half of  二0 一 六.

The high increase was attributed to strong purchasing demand ahead of the adjustment in special consumption tax on cars, which went into effect on July  一,  二0 一 六.

Along with slumps in profits, share prices of most automobile companies have tumbled between  一0 and  四 四 per cent, except for the shares of Hàng Xanh Co (HAX), which rose  八 per cent since the beginning of the year. – VNS