Pang Da forecasts massive 2012 losses

A major Chinese dealership group has reported massive losses for 2012 as a result of slow sales of Japanese cars.

Pang Da Automobile Trade Co., one of China’s largest dealership groups, estimates its losses for 2012 somewhere between 600m and 750m yuan ($97m to $121m).

This represents the company’s return to 2010's loss-making environment and is a sharp decline from the 650 million yuan ($104.1) it earned in 2011.

The company attributed the losses to a major fall in the sale of Japanese brands in the last four months of 2012, after a territorial dispute sparked a wave of nationalism amongst Chinese car buyers.

Pang Da is a major stockist of Toyota, Honda, Nissan, Mazda and Subaru vehicles. Sales were also hampered by weak demand in the nation’s commercial truck market.

Pang Da has borrowed extensively to fuel an aggressive nationwide expansion, making it subject to heavy debt repayment pressure from Chinese banks. The figures are currently estimated with the company yet to release its final 2012 financial report.