(Yicai Global) Sept. 1 -- First-half profit at Chinese carmaker Anhui Jianghuai Automobile Group Corp. Ltd. [SHA:600418], better known as JAC, dived 40 percent as costs increased and car sales declines.

Income in the first six months was CNY25.3 billion (USD3.84 billion), down 4 percent on the year, while net profit slumped to CNY345 million (USD52 million), the firm's interim report, published on Aug. 31, shows.

JAC attributed the declining performance to a fall in sales, withdrawal of new-energy vehicle subsidies and a rise in the price of raw materials. The company's total operation costs were CNY25.4 billion in the period.

Rising competition and customer complaints saw sales fall to 127,400 from January through July, down 38.9 percent. Sales of JAC's sports-utility vehicles, its core business, have been falling for seven straight months, and dived by more than 50 percent annually for three straight months from May.

On the upside, JAC recently began a cooperation with internet giant Baidu Inc. [NASDAQ:BIDU], under which the pair aim to release an autonomous vehicle by 2019. Baidu will provide solutions for the key points of the car, and JAC hopes sales will have picked back up by the time it is released.