Published on March 23rd, 2018 | by Daniel Sherman Fernandez0
Geely Doubles Its Profits in 2017
Looks like Geely Automobile Holding will be on a continued shopping spree this 2018 as it has just released a statement showing its profits has more than doubled in 2017, driven by strong domestic sales of popular SUVs. Geely made the profit statement in a stock exchange filing that 2017 net profit rose 108% to USD1.7 billion from USD0.8 billion in 2016.
Geely, which is making waves globally after a series of high-profile deals by its parent, saw revenue rise 73% from a year earlier, far outpacing tepid growth in the wider Chinese vehicle market.
Geely said in the filing that “numerous acquisitions” over the past few years by its parent group should provide “substantial opportunities for technologies and cost sharing, economies of scales and new market penetration.”
“Longer-term, these acquisitions should provide additional sources for growth of the group,” Geely said.
Li has ambitions of making Geely into a major global automaker and as part of that plan, he unveiled Lynk & Co in 2016, a brand that targets younger customers. Lynk & CO could start its production at a Volvo plant in Belgium, and on Wednesday, President An Conghui said the company will unveil a strategy for the U.S. market this month.
With such plans, expertise from Daimler’s Mercedes-Benz and Volvo could prove valuable. Those manufacturers have a long history in serving western markets and are further along than Geely with new technologies including connected online services and self-driving features.
China’s auto market is facing a broad slowdown, in part due to the withdrawal of subsidies for certain more fuel-efficient cars. Vehicle sales for the first two months of the year rose 1.7 percent. Competition is also rising as firms race to meet tough new quotas for fully electric and plug-in hybrids cars.
“While we remain optimistic about the growth prospects for the Chinese passenger vehicle market, the elimination of purchase tax subsidies for fuel efficient vehicles from January 2018 could have some negative impact on the sales volume growth of passenger vehicles in China during the early part of the year,” the company said.