During 2009, the Group had undergone tremendous transformation. The disappointing performance of the Zhonghua sedan business in the past had adversely influenced and suppressed the true intrinsic value of the Group. Therefore, during the year management decided to exit the Zhonghua business via a disposal to the Huachen Group, the Group’s major shareholder. The disposal will not only provide an immediate earnings enhancement but will also enable the Group to refocus its management and financial resources on the development of its existing profitable businesses and potential new ventures. The transfer had taken effect on 31st December, 2009, and the significant losses recorded for 2009 was primarily a result of the operating losses incurred by the Zhonghua business during the year, as well as writedowns and losses associated with the sale of the Zhonghua operation.
With respect to our minibus business, despite a competitive operating environment, the Group continued to maintain its market leading position in 2009. A total of 78,968 minibuses were sold in 2009, representing an increase of 6.9% from the 73,863 units sold in 2008. The deluxe minibuses had shown a particularly impressive sales volume increase of 21.3% during the year, primarily driven by the new Granse model which has been very well received by the market since its launch in 4Q2009.
The BMW Brilliance joint venture registered sales of 44,888 units in 2009, an increase of 28.0% over that of 2008. The joint venture’s cost cutting effort has continued to show results, as demonstrated by the 39.0% increase in profit contribution to the Group from the joint venture in 2009 compared to that of the previous year.
