July 18 – Harbin Dongan Auto Engine (600178) and Chongqing-based China Jialing Industrial (600877) predict that net profits for the first half of 2011 will fall by more than 50 percent year-on-year, reports China Business News, citing filings. According to Dongan, the cancellation of a preferential tax policy for vehicle purchase caused sales of engines used in small vehicles to plummet during that period.

The firm’s investment in Harbin Dongan Engine Production Limited posted a sharp year-on-year drop in returns. Dongan earned net profits of 102.38 million yuan with earnings per share of 0.22 yuan the same period one year ago.

Some 59 percent of Dongan’s business came from Hefei Automobile, which saw weak growth during the first six months of this year.

Jialing has been hit with steadily rising raw material prices and implementation of emission standards, hammering motorcycle sales.

Currency fluctuations and an increase in interest rates were also blamed.

During the first half of 2010, Jialing earned net profits of 5.43 million yuan with earnings per share of 0.0079 yuan.

During the first half of 2011, China produced and sold 13.13 million and 13.16 million motorcycles, falling 11.53 percent and 8.57 percent year-on-year respectively.