Chinese carmaker Dongfeng slumps 11% on 2023 loss forecast

investing.com:

Investing.com-- Hong Kong shares of Dongfeng Group (HK:0489) fell sharply on Monday after the Chinese carmaker warned investors that it was likely to clock a loss for 2023 amid weakening vehicle sales and competition from electric vehicles. 

Dongfeng’s shares slid 11.2% to HK$3.02, hitting a near one-month low. They largely lagged the broader Hang Seng index, which rose 1% on Monday.

Dongfeng said it expected a net loss attributable of not more than HK$ 4 billion ($500 million) for the year to December 31 2023, compared to a profit of HK$10.27 billion a year ago.

The firm cited pressure on sales of its non-premium joint venture brands, which saw vehicle prices fall sharply over the past year. The company has ventures with several international carmakers, including Honda (NYSE:HMC) Motor Co Ltd (TYO:7267), Renault SA (EPA:RENA), Nissan Motor Co., Ltd. (TYO:7201) and Stellantis NV (NYSE:STLA), and sells their branded vehicles in China.

But China’s vehicle market faced increased pressure over the past year as consumer spending slowed, with traditional, internal combustion engine vehicles seeing a sharp sales decline on competition from the EV sector. 

Dongfeng has no EV offerings,  and said on Monday that its new energy business was still in “the strategic investment period.”