Dongfeng Motor Group Co. Ltd. is keeping its target of selling 760,000 vehicles in 2006 despite fierce competition, its president said.

Dongfeng, China's third-biggest auto maker, sold 594,932 vehicles from January to October, up 20.83 percent from a year earlier, matching 2005's full-year volume, Liu Zhangmin told reporters over the weekend.

Passenger car sales, its major growth driver, jumped 34.79 percent to 384,782 units during the period as Dongfeng's joint ventures with Nissan Motor, Honda Motor and PSA Peugeot Citroen rolled out new models.

In October, vehicle sales rose 31.96 percent from a year earlier to 62,468 units, with passenger car sales up 34.96 percent at 39,746, Liu said."This is a tough market," Liu said at the company's headquarters in central China. "We had aimed to sell 760,000 vehicles in 2006 and still stick to that target. But we will by no means pursue volume at the expense of profit margins."

In 2007, Dongfeng's vehicle sales will grow more than 15 percent, beating estimated 10-15 percent growth of the overall Chinese market, as no less than four new models hit the showrooms, predicted company Vice President Cai Wei.

China, once an easy profit centre providing global giants with double-digit margins, has become one of the industry's most intense battleground as Ford Motor Co, Toyota Motor Corp. and the likes invest billions of dollars to ramp up capacity.

Dongfeng, which raised US$509 million in a share sale in Hong Kong in December 2004, saw its average gross profit margin climb to 17.5 percent in the first half of this year from 13.1 percent a year earlier because of cost-cutting measures.

Gross margins for the full year could hover at similar levels, given expected brisk sales in the fourth quarter and continued improvement in the cost structure, executives said.

Dongfeng, located in the industrial city of Wuhan, posted a 69 percent jump in first-half net earnings on the back of higher sales and a turnaround at its tie-up with PSA Peugeot, which raked in a net profit of 191 million Yuan ($24.26 million) in January-June, versus a year-earlier loss of 636 million Yuan.

Source:佚名