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China's automakers earn US$10b in 2006

(Xinhua)
Updated: 2007-02-19 17:14
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China's automobile industry made a profit of 76.8 billion yuan (10 billion US dollars) in 2006, up 46 percent from the previous year, according to figures from the China Association of Automobile Manufacturers (CAAM).

A report by the CAAM said in 2006 China's auto industry sold 7.22 million auto vehicles, increasing 25 percent over 2005, and the country overtook Japan for the first time to become the world's second largest auto market.

China's automakers last year produced 7.28 million vehicles, up 27.32 percent over the previous year, making the country the third largest auto producer in the world.

The report predicted that in 2007 China's auto market demand will reach eight million.

However, auto dealers did not have a good time in 2006, with up to 40 percent of them suffering heavy losses.

Statistics show that of the 1,800 franchised auto dealers nationwide, about 700 were in the red, of which 300 have been merged or edged out of the market.

A manager of a franchised auto shop said that another 20 percent of auto dealers are struggling on the brink of deficits due to fierce competition.

China's auto industry has been developing rapidly in recent years, mainly driven by sharply increased individual buyers. In 2006 more than 100 new sedan models hit the country's market, including 36 homegrown brands.

China has about 1,500 registered auto producers, of which fewer than 100 sold more than 10,000 vehicles last year. Many small manufacturers sold only 300 to 500 vehicles. The National Development and Reform Commission warned in December 2006 that the auto industry was overheated, which could lead to over production.

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