The profits of China's automobile industry last year dropped by 8 percent on the previous year to only 70 billion yuan, or 8.5 billion US dollars.

Experts say the low profits can be attributed to rising prices of raw materials, which have raised production costs by 10 to 15 %. This is combined with industry competition, which has pushed sales prices down by 11 %.

But they estimate that China's automobile industry will continue to grow in 2005 at a pace of 15 to 20 %.