Geely beats Nissan in China as sales to top target

The carmaker now trails only VW and GM in China, after overtaking Nissan, Honda and Toyota

By BLOOMBERG

BEIJING • Geely Automobile Holdings Ltd surpassed its top three Japanese rivals to become the third-largest carmaker in China, helped by models that appeal to the nation’s young consumers.

Reporting a 54% jump in net income for the six months through June, the carmaker said in a filing yesterday that sales this year will beat its target of 1.58 million units. Geely now trails only Volkswagen AG (VW) and General Motors Co (GM) in China, after overtaking Nissan Motor Co Ltd, Honda Motor Co Ltd and Toyota Motor Corp in the period.

Controlled by billionaire Li Shufu, Geely is among Chinese carmakers seeking to dominate the auto industry as newer technologies such as electrification and automation define the future of transportation.

With an eye on leadership in its key market, Geely has been expanding, offering vehicles such as those under the Lynk & Co brand jointly developed with Volvo Car Group, which Li’s Zhejiang Geely Holding Group Co Ltd bought in 2010.

“In view of an even stronger new products pipeline ahead, the group should be in a good position to secure higher market share in China’s passenger vehicle market in the near future,” Geely said in its filing.

The mainland market share of the Hong Kong-listed company increased to 6.4% in the first half (1H) of this year, from 5% in 2017. It sold 766,630 vehicles in the period, beating Nissan’s 720,447. Geely sold 1.25 million vehicles in 2017.

Li has also been active overseas, expanding his automotive empire. After his purchase of Volvo Cars from Ford Motor Co, he snapped up stakes in the iconic British sports-car maker Lotus Cars and Malaysia’s Proton Holdings Bhd. In February this year, he disclosed a 9.7% stake in Daimler AG, emerging as the largest shareholder in the maker of Mercedes-Benz.

The company will start selling its Lynk & Co cars in Europe soon, marking its global foray, CEO Gui Shengyue told reporters in Hong Kong yesterday. The company plans to sell the vehicles in Europe by 2020.

“We have a real product to go global now,” he said. Although cuts in subsidies for electric vehicles and the tariff war between the world’s biggest economies will weigh on industry sales in the 2H, the company will build on the momentum from the 1H, it said. Shares of Geely rose 1% to HK$16.54 (RM8.65) yesterday in Hong Kong.

Chinese car sales slumped for a second consecutive month in July as a slowing economy and a tit-for-tat trade war with the US kept consumers away from showrooms.

Retail sales of cars, SUVs and multipurpose vehicles fell 5.4% to 1.6 million units in July, the China Passenger Car Association said. That compares to a 3.7% drop in June, trimming the year-to-date growth in the world’s biggest automobile market to 2%.

Geely has been far outpacing the broader market by posting 43% increase in its sales in the first seven months this year.

Net income at Geely rose to 6.67 billion yuan (RM4 billion) from 4.34 billion yuan a year ago, according to the filing. Revenue jumped 36% to 53.7 billion yuan.