Geely Automobile Holdings Co Ltd updates
Sign up to myFT Daily Digest to be the first to know about Geely Automobile Holdings Co Ltd news.
Chinese carmaker Geely Auto has warned of continued “uncertainty” around production because of chip supply shortages, underscoring sustained pressure on the recovery in the world’s largest car market.
Geely, the Hong Kong-listed subsidiary of China’s largest private carmaker by sales, on Wednesday announced revenues of Rmb45bn ($6.9bn) for the first six months of 2021, up 22 per cent year on year but below the Rmb48.9bn average estimated by a Bloomberg analyst survey.
The group reported net profits of Rmb2.38bn, up only 4 per cent compared with the same period last year. This was also below market expectations of Rmb3.2bn.
The lower than expected sales growth was in part caused by continued disruptions from a shortage in semiconductor supplies that posed a “serious challenge” to production, according to Geely’s chief executive Gan Jiayue.
“Short supply of chips is still a big uncertainty,” he said. “You want me to give you a promise of when it will be resolved but I can’t tell you when.”
“Geely will be less affected by the short supply of chips than our competitors,” he added, explaining that the group had been stockpiling chips since September.
The global shortage of chips during the coronavirus pandemic has slowed the post-lockdown recovery in China’s auto market. June sales figures fell to 2.02m, which was 12.4 per cent lower than the same month a year earlier.
Automakers sold 12.8m vehicles in the first half of 2021, up 25.6 per cent year on year but still below pre-pandemic levels.
Geely’s total sales from January to June were only 19 per cent higher than a year before at 630,237 units. The group kept a year-end sales target of 1.53m, despite the risks of continuing chip shortages.
Geely Auto is the main subsidiary of Geely Holding, one of China’s most ambitious carmakers and the owner of Volvo Cars and a minority stake in Daimler AG. Alongside the flagship Geely marque, the group also includes brands Lynk & Co, Proton, Lotus and Geometry.
Geely Holding has in the past year sought to embed itself at the core of the Chinese auto industry’s transition away from petrol by providing its battery-powered car manufacturing system to peers such as technology group Baidu.
In March, it launched Zeekr, a premium electric car brand that aims to challenge industry leader Tesla. Deliveries of the marques first model are expected to begin next month.
The group announced on Wednesday a goal of selling 3.65m vehicles a year by 2025, 30 per cent of which would be battery-powered or hybrid cars. Zeekr would account for 650,000 units of those sold, according to the plan.