- Geely Automobile Holdings Limited (Group) report half-year revenue of RMB 47.56 billion and profit of RMB 4.01 billion.
- Average selling price increase with higher ratio of high-end models sold
- Future focus on high-quality development, enhancing core technological capabilities, and accelerating brand building.
- Retail market share up from 6.3% to 6.5%.
- Exports surged 334% to 38,619 units accounting for 5.9% of the Group’s total sales volume.
- New energy vehicles sales up three fold.
2019 August 21, Hong Kong. Geely Automobile Holdings Limited (Group) (HK.0175), a Hong Kong-listed subsidiary of Zhejiang Geely Holding Group, released its interim results for the first half of 2019. During the period the Group’s performance was below the management’s expectations with total revenue (excluding the revenue of the Group’s 50% owned joint venture, namely Lynk&Co JV) decreased by 11 % to RMB 47.56 billion, compared to the same period last year. Profit attributable to the equity holders of the Group for the first half of 2019 was down 40% YoY to RMB 4.01 Billion. The Group sold a total of 651,680 units in the first half of the year, down 15% YoY.
Affected by several factors such as the lack of consumer confidence due to the Sino-US trade friction and the change to China VI emission standards, “uncertainty” has intensified in the automobile market. In the face of uncertainty, the Group has continued to advance down the path of high-quality development. The Group’s overall market share based on retail sales has increased from 6.3% to 6.5% since 2018 with a more balanced product matrix. The average selling price of the Group’s products has improved as the proportion of high-end product sales increase, showing that the Group’s strategic re-alignment measures were effective in stabilizing and boosting development. In the future, in the face of global economic downturn and automotive industry cycle adjustment, the Group will continue adhering to a clear and firm development direction, implement a new round of systematic strategic re-alignment, and continue promoting high-quality development.
Balancing Brand and Product Development
In 2019, the Group’s product matrix continued to diversify to meet the market’s demand for high-end, personalized, sporty products. In the first half of the year, the Group’s cumulative sales reached 651,700 units, ranking first among Chinese auto brands. SUVs accounted for 56% of total sales, sedans accounted for 42%, and newly introduced MPVs accounted for 2%, showing a balanced development of sedans, SUV and MPVs.
The data shows that in the past five years, the average retail selling price of the Group’s products has increased from RMB 77,000 to RMB 123,000. As of the first half of 2019, sales of products priced over 80,000 yuan accounted for 71.3% of sales, up nearly six fold since 2013. The proportion of younger Geely customers in first- and second-tier cities is growing rapidly with customers born after 1990 accounting for more than 51% of total users. With the launch of the high-end pure electric brand, Geometry, earlier in April of this year, the Group’s brand matrix now consist of Geely Auto, Lynk & Co, and Geometry. Each brand has been developing steadily hand in hand and together they continue to raise the brand premium of the Group.
As the automotive industry enters a new stage of global competition, the Group will grasp the opportunities presented by market adjustment, enhance its core technological capabilities, accelerate brand building, strengthen the up and downstream value chains throughout the industry, and enhance its brand premium and global competitiveness.
Improving Global Competitiveness
The Group has entered the era of modular manufacturing. Relying on its global R&D and design network consisting of 5 R&D centres and 5 design centres, 3 new modular vehicle architectures has been developed, the BMA, CMA, and pure electric PMA.
The Group has built a community around shared interests and shared destiny with its suppliers and distributors. In the first half of the year, the Group’s dealers maintained a healthy ratio of stores-to-sales. In July, the Group lowered its sales goal to strengthen the operating capacity of its dealership network and also to strengthen its upstream supply chain network. In addition, the Group has established a globally competitive supply chain with many international suppliers.
In overseas markets, as a result of newer models, improved brand presence, and upgraded dealership networks, the Group’s export sales volume surged significantly by 344% to 38,619 units in the first half of 2019. Export sales accounted for 5.9% of the Group’s total sales volume in the first half of 2019, compared with only 1.1% in the same period in 2018.
Accelerating the Pace of Scientific and Technological Advancement
In 2019, the Group raised the importance of scientific and technological advancement to build up its core competitiveness as a global innovative technology group.
The Group remains committed to introducing electrified and fully electric vehicles that are in line with consumer requirements, and as such have put in place several partnerships to guarantee the supply of core components. In June of this year, the Group and LG Chem established a joint-venture to continue providing consumers with new energy and electrified products at competitive prices. In the first half of 2019, the Group sold a total of 57,600 new energy vehicles, up three fold from the same period in 2018.
In the field of intelligent drive, the Group released its “Geely Automated Valet” system in May 2019. Within the first half the year, the Group has sold over 450,000 models capable of L2+ level of autonomous driving. Geely Auto raised the bar for intelligent connected vehicles with the launch of the new Bo Yue PRO equipped with the GKUI 19, the latest upgraded version of the Geely Smart Ecosystem, and dedicated high-performance vehicle chip.
Looking ahead, the Group will adhere to the overall strategy of “continued perseverance, strategic transformation, new breakthroughs, cultivating talent, and increasing comprehensive synergies.” The Group will continue maintaining its strategic strengths with confidence in its technologies, products, brands, and culture. It will continue to be a brand leader, enhance its global competitiveness, and promote sustainable, high-quality development.