GAC Group forecasts huge decline in profits

Guangzhou Automobile Group Co Ltd, the Chinese partner of Toyota Motor Corp and Honda Motor Co Ltd, predicts a substantial net profit decline for 2012 in its preliminary fiscal performance review.

An analyst said the Chinese automaker's waning business performance should be largely attributed to the Japanese brands' falling market demand due to the tensions over the Diaoyu Islands.

GAC Group said it expects its net profit for 2012 to be between 850 million yuan ($135 million) and 1.28 billion yuan, down from 4.27 billion yuan in 2011.