Dongfeng Motor Shares Slump After Profit Warning
The company attributed the expected loss partly to weaker performance at its joint venture business
Dongfeng Motor’s shares slumped after the Chinese automaker said it expects to swing to loss for 2023 amid intensifying competition.
Shares were 11% lower at 3.01 Hong Kong dollars (US$0.38) at the Monday midday break, taking losses this year to 23%.
Wuhan, China-based Dongfeng, a manufacturing partner of Stellantis and one of China’s “big four” state-run automakers, said in a filing ahead of the trading week that it expects to post a net loss of up to 4.0 billion yuan (US$556.6 million) for 2023, from net profit of CNY10.265 billion in 2022.
The company attributed the expected loss partly to weaker performance at its joint venture business, whose sales volume fell by 16% in 2023.
“The market space for the joint venture non-premium brands has been significantly squeezed and the prices of the products have been declining,” the company said in the filing. Dongfeng has a number of joint ventures, including Dongfeng Nissan and Dongfeng Honda.
Dongfeng also cited higher research and development costs and other expenses for its new-energy business behind the likely loss.
Industry vehicle sales in China fell sharply in February amid an intensifying price war. Retail sales of passenger cars declined 46% from January, the China Passenger Car Association said Friday.