Geely reports profit of 8.26 billion RMB in 2019, down 34%

Geely Automobile released its financial results for 2019, reporting a revenue of 97.4 billion RMB (Rs 102,952 crore), down 8.63 percent, net profit of 8.26 billion RMB (Rs 8,730 crore), down 34 percent. Despite challenging condition globally, Geely Auto says it continued to remain the sales champion among Chinese brands for the third consecutive year with total sales of 1.362 million units.

The company says its business was affected by multiple factors such as global economic downturn, Sino-US trade frictions, changes to China VI emission standards, and the overall automotive market saw a decline in 2019. In spite of the challenging market environment, Geely Auto maintained a strong position and saw its market share increase from 6.2 percent to 6.5 percent. The OEM’s income also became more diversified with auto financing becoming a new point of growth.

In 2019, the company says its three brands under Geely’s Hong Kong listed entity, Geely Auto, Lynk & Co (50% held by Geely Automobile Holdings Ltd.), and Geometry continued to develop at the same pace with new sedans, SUVs, and MPVs being launched. In the last five years, Geely Auto says it has grown at a compound annual rate of over 30 percent, becoming the top-selling Chinese brand in the market. In 2020, Geely Auto was ranked third overall in cumulative sales from January to February, achieving a market share of 7.3 percent, the highest in the company’s history.

In terms of retail, Geely Auto says the sales of models priced over 100,000 RMB (Rs 10.57 lakh) accounted for 39 percent of all sales, ten times more than it was seven years ago and becoming a major profit segment for Geely Auto. The average price for Lynk & Co models reached 156,000 RMB (Rs 16.48 lakh), strengthening the Lynk & Co’s brand premium.

In 2019, Geely Holding Group became the only Chinese automaker on the “Top 10 Global Automotive Groups” published by British brand evaluation agency Brand Finance. For exports, the company shipped over 58,000 units in 2019, a 109 percent YoY increase.

Focus on new modular architectures
During the year, Geely Auto also focused on developing new modular architectures, the CMA Compact Modular Architecture jointly developed with Volvo Cars creates a new global benchmark in terms of safety, reliability, and quality. The newest representative model built on the CMA architecture is the Lynk & Co, which began pre-sales on March 28. For the Geely Auto brand, the Xingyue Coupe SUV made on the CMA architecture became the new flagship model of the brand.

Within Geely Auto Group, four global modular architectures, BMA, CMA, SPA, and PMA has been developed to comprehensively cover all product requirements from pure electric to traditional fuel, from compact to mid-sized to executive class models. With the gradual advancement of Geely Auto’s modular architecture strategy, the company will grow more competitive globally and be able to offer users even better mobility experiences.

Geely Auto’s parent company, Geely Holding Group invested more than 20 billion RMB (Rs 21,140 crore) in R&D, accounting for 6 percent of its revenue. The OEM says after investing over 100 billion RMB (Rs 105,700 crore) in R&D over the past decade, the fruits have begun to show. Geely Auto’s mass-production models equipped with L2+ intelligent drive leads the industry in market share amongst Chinese brands. Geely Smart Ecosystem GKUI has been installed in over 1.75 million Geely vehicles, making it among the leaders in the era of intelligent connected vehicles.

Geely Auto and Volvo cars merger
At present, new technologies causing unprecedented changes to global development and human lives, are also sweeping across the automotive industry. Geely proactively embraces change and develops through innovation. The company is creating new advantages through the integration of its online and offline presence. 2020 is the tenth anniversary of Geely Holding’s acquisition of Volvo Cars and in this significant year, Geely Auto and Volvo Cars have entered into a discussion around the merger and reorganisation of the two entities. Together the two sides will become a stronger global enterprise with greater synergy, economies of scale, technical capabilities, and resources which will allow them to lead change in the industry.