Carmakers' profits slump

Profits for Chinese carmakers dropped by 7.9% in the first three quarters of 2004, their first fall in six years according to official government figures. Profits for Q3 2004 fell 33.6% from the same period last year and 44.5% from Q2, an official from the National Bureau of statistics told state media. The official did not reveal actual profit figures. He said the decline was caused by manufacturers slashing prices in an effort to boost sales and by a cut in overall output. Average prices on the Chinese car market have declined by around 15% year-on-year, one analyst told the China Daily. Falling sales have been blamed on a combination of government efforts to restrict banks issuing car loans, soaring oil prices and customers' expectations of further price cuts.