Business / Corporate

Volvo owner Geely overtakes Nissan to snatch third spot in China's auto market


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 percent jump in net income for the six months through June, the carmaker said in a filing Wednesday that sales this year will beat its target of 1.58 million units. Geely now trails only Volkswagen AG and General Motors Co. 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 the 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 that it jointly developed with Volvo Car Group, which Li’s Zhejiang Geely Holding Group Co. 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 percent in the first half of this year, from 5 percent 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 percent 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, continuing its global foray, Chief Executive Officer Gui Shengyue told reporters in Hong Kong on Wednesday. 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 of the year, the company will build on the momentum from the first half, it said. Shares of Geely rose 1 percent to 16.54 Hong Kong dollars on Wednesday.

Chinese car sales slumped for a second consecutive month in July as a slowing economy and a tit-for-tat trade war with the U.S. kept consumers away from showrooms. Retail sales of cars, SUVs and multipurpose vehicles 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, trimming the year-to-date growth in the world’s biggest automobile market to 2 percent.

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

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.