Geely Becomes China's Third Largest Automaker with Strong Sales
【Summary】Geely reported a 54 percent jump in net income for the six months through June. The company said in a filing Wednesday that its vehicle sales this year will beat its target of 1.58 million units. During this time, Geely overtook Japanese automakers Nissan, Honda and Toyota. The Hangzhou-based company is China’s number one private automaker after Great Wall Motors.
Geely Automobile Holdings surpassed its top three Japanese rivals to become the third-largest automaker in China, behind Volkswagen and General Motors, Bloomberg reported. Geely's sales were boosted by new models, including the Vision S1 crossover, a vehicle that appeals to younger, urban buyers.
The automaker reported a 54 percent jump in net income for the six months through June. Geely said in a filing Wednesday that its vehicle sales this year will beat its target of 1.58 million units. During this time, Geely overtook Nissan, Honda and Toyota. The Hangzhou-based company is China's number one private automaker after Great Wall Motors.
Controlled by billionaire Li Shufu, Geely is among Chinese automakers seeking to dominate the auto industry as newer technologies such as electrification and autonomous driving reshape the future of transportation. Geely has been expanding its offerings, introducing new vehicles produced under the Lynk & CO brand jointly developed with Volvo.
"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 percent in the first half, from 5 percent in 2017. Geely sold 766,630 vehicles in the period, compared to 720,447 units sold by Nissan. In total, Geely sold 1.25 million vehicles in 2017.
Shufu, who is Geely's chairman, has been expanding his automotive empire. He purchased Volvo from Ford in 2010, as well as stakes in the iconic British sports-car maker Lotus Cars. Earlier this year, Shufu disclosed that he acquired a 9.7 percent stake in Daimler, making him the largest shareholder in the company.
Chinese car sales slumped for a second consecutive month in July as a slowing economy and a ongoing trade war with the U.S. Retail sales of cars and SUVs fell 5.4 percent to 1.6 million units in July, the China Passenger Car Association said. That compares with a 3.7 percent drop in June. However, Geely has been far outpacing the broader market, by posting a 43 percent increase in its sales in the first seven months this year.
The Geely Bo Yue at a dealer showroom in Shanghai
Geely's ‘Pivot to SUV' strategy, which it announced in 2016, appears to be paying off. The company used its strength in the sedan segment to push hard into the SUV markets, launching three new SUVs models in 2016. Geely's flagship Bo Yue sold over 30,000 units in October 2017, followed by the Emgrand GS, the first crossover from Geely Auto and the popular Vision S1 SUV. Since launching in March 2016, Geely sold over 500,000 Bo Yue SUVs.
Net income at Geely rose to 6.67 billion yuan ($975 million) from 4.34 billion yuan a year ago, according to the filing. Revenue jumped 36 percent to 53.7 billion yuan.
Geely reported annual sales of 1,247,116 units in 2017, an increase of 63% from the previous year and beating their revised annual sales target of 1.1 million units. December 2017 sales reached a new high of 153,625 units, an increase of approximately 42% over the same period last year.
These sales figures represent a big turnaround for Geely. In 2008, Geely was rated dead last among China's 36 automakers. After purchasing Volvo for $1.8 billion in 2010, Geely became the first automaker to ship made-in-China Volvo vehicles to the United States.
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