With sales of cars having reduced, FAW in China suffered another decrease in the revenue and the net profit in the first quarter in 2016.

 

In the first quarter of 2016, revenue of cars business decreased by more than 40% compared with that of a year earlier. And net profit declined by even 400%. Look back on 2015, revenue decreased by 21.25% and net profit declined by 64.75%.

 

Growth of the segment of passenger vehicles is decreasing. Many automakers turn to sell vehicles at a lower price, making it difficult for automakers to make profits to some extents. However, different from FAW, other Chinese automakers have been taken up larger market shares in the Chinese market.

 

Therefore, FAW failed to launch competitive products, mainly leading to its bad sales overall. FAW has three brands including Hongqi, Besturn and Oley. However, none of these three brands had helped FAW reap good sales.

 

After brought to market in 2012, monthly sales of Oley were only about 100 units. FAW invested about RMB 16 billion yuan on developing Hongqi, a brand with a long history. But it turned out that Hongqi hadn’t performed as greatly as expected. Sales of Hongqi were only about 5,000 units in 2015. Besturn did perform better than those two brands at the beginning. However, failing to launch new models have made Besturn lose its customers gradually.

 

FAW has taken measures to increase sales. However, whether it can overcome difficulties remains unknown.