BEIJING (Reuters) - China’s Great Wall Motor Co Ltd (601633.SS), (2333.HK) said on Friday it had swung to net loss in the first quarter this year after its profit dropped 13.6% last year, as the coronavirus epidemic hits the world’s biggest auto market.
The Baoding-based company, which has a joint venture with German luxury automaker BMW (BMWG.DE), said in a stock exchange filing it reported a 650 million yuan (74.38 million pounds) net loss in the first three months this year, down 184% from a 773.3 million yuan profit a year earlier.
Hit by the coronavirus epidemic, China’s overall car sales fell 42% in the first three months compared with a year earlier. Sales of Great Wall, which is known for its popular sport-utility vehicle models, dropped 47%.
Great Wall said the epidemic’s impact on auto sales and devaluation of the Russian rouble were the reasons for the profit drop in the first three months this year. Great Wall is building cars from its plant in Russia.
It also agreed to buy two plants in India and Thailand from General Motors (GM.N) and expects transactions for both factories to be completed in the second half of 2020, and will revamp their production lines to make its models.
In 2019, Great Wall reported 4.49 billion yuan profit, down from the previous year’s 5.2 billion yuan. Rival Geely Automobile’s (0175.HK) profit dropped 35% last year while BYD fell 42%.
Great Wall Chairman Wei Jianjun said earlier the firm does not want to enter into a price war in the market slowdown. Great Wall now aims to sell 1.02 million units in 2020, down from last year’s sales of 1.06 million units.
Reporting by Yilei Sun and Brenda Goh; editing by David Evans