Shanghai (ZXZC)- Tianjin FAW Xiali Automobile Co., Ltd (FAW Xiali) reached operation revenue of RMB 1.451 billion in 2017, slumping 28.34% year on year, and the net profit attributable to shareholders was RMB -1.641 billion, nosediving 1,110.64% from a year earlier, according to the financial report the company release a few days ago.

Besides, the report also showed that by the end of 2017, the total asset value of the company was RMB 4.9 billion and its total liability topped RMB 4.8 billion with the debt-to-asset ratio being at 98.2%.

In addition, the automaker predicted that it may face profit loss around RMB 200 million to RMB 250 million in the first quarter of 2018. Meanwhile, the company ascribed the profit loss to the immature product portfolio, low production output and sales volume as well as the relatively weak profitability.

On April 11, FAW Xiali received an inquiry letter from Shenzhen Stock Exchange, who required the automaker to explain its profit loss. The company said, due to the lack of sufficient knowledge about the current national auto market and the R&D of forward-looking technologies, the incompetence in product development, marketing and branding, the company failed to keep up with the changeable demands and the fast consumption upgrading in auto market, thus resulted in rather sharp drop in production output, sales volume and profitability.

According to the announcement, the company’s total vehicle sales in 2017 suffered a year-on-year collapse of 26.4% and its gross margin in auto manufacturing slumped 30.41% from a year earlier as well. The automaker attributed such loss to the adjustment in sales structure and price as well as the decreasing output and sales volume. Meanwhile, FAW Xiali confirmed that it had stopped the production of old models last year and will make great efforts to prepare the new products’ manufacturing and marketing promotion.

According to the statistics from WIND, as early as 2013 and 2014, the company had suffered losses of RMB 480 million and RMB 1.66 billion respectively. Then another annual loss up to RMB 1.64 billion happened in 2017. In fact, restricted by the improper product position, the company had suffered losses (after deducting non-recurring gains and losses) for 6 consecutive years since 2012.

The State-owned Assets Supervision and Administration Commission of the State Council had permitted FAW Group to transfer its RMB 395 million worth of shares in FAW Xiali through a public recruitment of transferees, according to an announcement FAW Xiali released in November 2017. However, FAW Group failed to get qualified transferees by the end of November 20, 2017, and then had to terminate the public recruitment.

FAW Xiali stated that the company had already promoted the sedan Junpai A50 in March this year and may release the crossover Junpai CX65 and the A-class SUV T086 in the second half of 2018. As to NEVs (new energy vehicles), the company plans to launch the BEV (battery electric vehicle) A70EV with a range up to 300km this year and a new BEV SUV model in 2019.