Guangzhou Automobile Group, one of China’s big state-owned auto companies, announced it expects its 2012 net profit to decline by 70 to 80 percent from a year earlier.
“The estimated results have not been audited by any certified accountants,” reads the statement cited by Reuters, adding that the figures represent preliminary estimates. Last year, the carmaker posted a net profit of approximately 4,271,619,000 yuans ($686.6 million).
Guangzhou Automobile, which builds cars with Honda, Toyota and Fiat, said a large part of the profit loss was caused by reduced sales determined by a political dispute between Japan and China over a group of East China Sea islands. The carmaker added that increasing competition and restrictions on car purchases in some central China cities also contributed to the strong profit decrease.
In a separate statement, Guangzhou Automobile’s joint venture with Fiat said that its current general manager Jack Cheng will be replaced by John Burton, a British-born executive with “over 40 years of global experience in the automotive industry”.
The appointment will take effect on March 1, GAC Fiat Automobiles said. Jack Cheng will become China country manager for Magneti Marelli, a Fiat component subsidiary.