SHANGHAI -- China's top minivan-maker, Chongqing Changan Automobile Co. Ltd., reported a fivefold leap in 2002 net earnings on Tuesday which analysts credited to a stronger focus on higher-end products and stringent cost-cutting.
Changan Auto's 2002 profit revved up 421.17 percent to 835.00 million yuan ($100.9 million) as sales jumped 35.13 percent to 301,852 vehicles, buoyed by strong demand for commercial vans in one of the world's fastest-growing auto markets.
Revenue jumped 34.8 percent to 9.88 billion yuan.
The company, which makes compact cars with Suzuki Corp. and is building another venture with Ford Motor Co., also predicted a shining 2003.
"Operations will experience an upward surge in 2003, with business forecast to increase by 50 percent in the first three months versus the same period of 2002," the company said in a statement published in the official Shanghai Securities News.
Analysts said Changan Auto's joint venture with Ford could contribute handsomely to its bottom line when it starts up, most likely in the second half of 2003.
Ford -- a latecomer to the Chinese market versus established rivals General Motors and Volkswagen AG -- and Changan Auto launched their first Fiesta compact car in January this year.
The U.S. automaker plans to sell 20,000 cars this year and 50,000 in 2004. The world's number two carmaker also said it would make Mondeo cars in China this year.
"Ford has said it will produce the Mondeo in the second half of the year, and that should help profits," said an analyst with a foreign brokerage in Shanghai.
Changan, which has 8.3 percent of China's auto market, said financial expenses for the year fell 402.96 percent, while sales of higher margin products rose a sharp 94.43 percent to account for 42.58 percent of sales.
"The sharp rise in 2002 net profit was due mainly to increased sales of higher margin products and reduced costs," said the Shanghai-based auto analyst.
China is increasingly a focus for global automakers seeking an escape from depressed or saturated home markets.
The country saw vehicle sales leap 37.1 percent to 3.248 million units in 2002, driven by rising incomes that were in turn fuelled by years of steady economic growth.