China's Geely sees minimal impact from U.S.-China trade row, 2018 sales jump

Updated: Wed, Aug 22, 2018
10:00 pm
Reuters
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China`s Geely Automobile Holdings Ltd shrugged off intensifying China-U.S. trade frictions on Wednesday, saying that it was likely to beat its 2018 sales targets and would push ahead with global expansion plans.

The firm, currently ranked the best-selling Chinese automaker globally by sales, was once known for cheaper, copycat designs but has assumed upmarket aspirations after a tie-up with Swedish brand Volvo Car Group.

Geely said growing tensions between Washington and Beijing were hurting market sentiment in China, but there was minimal direct impact on the firm because Geely did not depend on imported components or export sales.

The world`s two largest economies are set to implement tariffs against each other on billions of dollars of goods on Thursday.

"We will not change our strategy of entering the global market because of this," Geely Chief Executive Gui Shengyue told reporters in Hong Kong.

"I believe that our plans to enter the Southeast Asian market and European market will not be affected by the trade war between the United States and China," he added.

The company, based in the eastern Chinese city of Hangzhou, has benefited from high-profile deals made by its parent firm, unlisted Zhejiang Geely Holding Group, such as the acquisition of Volvo in 2010.

Affordable models introduced after that acquisition, such as the Boyue sport-utility vehicle (SUV), have been popular with buyers in China, where SUVs make up 58 percent of Geely`s total sales.

Southeast Asia is a key focus for the company, which on Saturday said it would extend its existing partnership with Malaysia`s Proton Holdings Berhad to upgrade help Proton establish a presence in China.

Daniel Li, Geely`s vice chairman, said that they believed the partnership could also help Geely develop the Malaysian market.

Geely sold 766,630 vehicles between January-June, 44 percent higher than over the same period last year, and is the best selling Chinese automaker globally, according to automotive data website Focus2move. The firm sold 1.2 million cars in 2017.

Geely said it was very confident of meeting or exceeding its full year sales volume target of 1.58 million units for this year, as it was entering the traditional high season for car sales and planned to introduce five new models this year.

The company posted a net profit of 6.67 billion yuan ($970.3 million) in the first six months of the year, up from 4.34 billion yuan in the same period a year earlier, outperforming the 6.55 billion yuan average estimate of four analysts, according to Thomson Reuters I/B/E/S.

Revenues during the period rose 36 percent year-on-year to 53.71 billion yuan.

($1 = 6.8740 Chinese yuan renminbi)

(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)

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