Boost for Volvo owner Geely as they are now a top-three carmaker in China

Boost for Volvo owner Geely as they are now a top-three carmaker in China

Geely Automobile — which makes Volvo, Geely, Lynk and other cars — 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 to the end of June, the carmaker said that sales this year will beat its target of 1.58 million units. Geely now trails only Volkswagen and General Motors in China, after overtaking Nissan, Honda Motor, and Toyota in the period.

Controlled by billionaire Li Shufu, Geely is among Chinese carmakers seeking to dominate the auto industry. With an eye on leadership in its key market, Geely has been expanding, offering vehicles such as those under the Lynk brand jointly developed with Volvo, which Li’s Zhejiang Geely Holding Group 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 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. Mr Li has also been active overseas, expanding his automotive empire.

After his purchase of Volvo Cars from Ford, he snapped up stakes in British sports-car maker Lotus Cars and Malaysia’s Proton. In February this year, he disclosed a 9.7% stake in Daimler, emerging as the largest shareholder in the maker of Mercedes-Benz.

The company will start selling its Lynk cars in Europe soon, marking its global foray, chief executive Gui Shengyue told reporters in Hong Kong. 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 second half, the company will build on the momentum from the first half, it said.

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. Net income at Geely rose to 6.67 billion yuan (€845m) from 4.34 billion yuan a year ago. Revenue jumped 36% to 53.7 billion yuan.

- Bloomberg

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