On August 21, Geely Automobile announced that the company’s revenue in the first half of the year was 47.56 billion yuan, down 11% compared with the same period of last year; net profit was 4.01 billion yuan, down 40% compared with the same period of last year. Among them, the total revenue was slightly higher than the previous market estimate of 45.92 billion yuan, and the net profit was slightly lower than the market estimate of 4.04 billion yuan (~US$572 million).
Geely said that the group’s performance in the first half of 2019 was lower than management’s expectations. On the one hand, the overall decline in sales in the Chinese auto market. According to the China Association of Automobile Manufacturers, the overall passenger vehicle sales in the Chinese market in the first half of this year fell by 14.0% year-on-year, while the total sales of Chinese brand passenger vehicles fell by 21.7%. On the other hand, the reason was that some cities of China officially implemented the CN-6 emission standards in advance in July 2019. In the first half of the year, Geely offered higher discounts and preferential measures to reduce dealer inventory, thus weakening gross margin performance.
At the same time, Geely pointed out that in order to maintain the competitiveness of the Group’s products in the weak market, the sales and distribution expenses of the same period had to be maintained at a high level. During the period, administrative expenses increased by 53%, mainly due to the increase in amortization and depreciation expenses caused by the large investment in research and development in the past few years. As a result, the profit attributable to equity holders of the Company for the first half of 2019 decreased by 40% year-on-year to RMB 4.01 billion.
In addition, according to data released by Geely Group, Geely Group’s total sales volume in the first half of this year was approximately 651,700 units, a decrease of approximately 15% compared with the same period of last year, reaching 43% of the Group’s annual sales target of 1.51 million units, which was lower than expected. However, Geely still won the first place in the sales of Chinese brands in the first half of this year.
According to reports, in the first half of 2019, new energy vehicles are still the focus of Geely’s new products. Geely Automobile said that in addition to the launch of the new pure electric model JIHE A (Aeometry A) in April this year, Geely has added more plug-in hybrid models. In the coming year, Geely will launch a variety of vehicles, among them, the Geely brand will launch a multi-purpose vehicle for enterprises users, a compact SUV model, a compact sedan model, and an electrified product of the existing model; The Lynk & Co brand will launch two all-new model, and the electrified products of Lynk & Co 02 and Lynk & Co 03; and a new model in JIHE series.
With the launch of more new energy products and China’s continued support for the new energy vehicle, Geely believes that the company’s new energy and electrified car sales will increase significantly in the next few years.