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Carmakers face possible bad debts

By Hao Zhou (chinadaily.com.cn)
Updated: 2007-08-02 14:25

Special coverage: Auto Shanghai 2007
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The total net profits of China's 10 largest auto manufacturers grew to 4.5 billion yuan (US$593 million) last year from 3.2 billion yuan the year before, an increase of 46.15 percent. However, their receivables amounted to 7.24 billion yuan last year, rising 58.28 percent from 2005, exceeding the growth rate of net profits.

Although Shanghai Automotive Co Ltd's receivables increased to 3.2 billion yuan last year from 895 million yuan in 2005, 97.18 percent of it was supposed to be collected one year ago. This means it has little impact on the carmaker.

Only China National Heavy Duty Truck Group Co Ltd (Sinotruk) and FAW Car Co Ltd saw a decline in their accounts receivable. Sinotruk said it reduced the number of clients who purchased its latest model by loans, and FAW Car cleared a lot of its receivables last year.

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The full text is available in the August Issue ofAutoChina.