BEIJING – Chinese automobile company Geely made a net profit of 12.55 billion yuan ($1.8 billion) in 2018, some 18 percent more than the previous year, despite a decline in sales of vehicles in the country for the first time since 1990.
In the 2018 results published by the Hong Kong Stock Exchange, the company accepted the dip in demand and economic uncertainty – in 2017 the increase in its profit was 108 percent – but it continued to be the top local brand in terms of sales volume, rising from 1.25 million vehicles sold to 1.5 million.
It continued in third place in the list of passenger vehicle brands in China, increasing its market share from 5 percent to 6.2 percent.
Its total revenue rose 14.9 percent to stand at 106.59 billion yuan, while the gross profit was up 19.6 percent to stand at 14.95 billion yuan.
During the slump in the Chinese market, it saw growth outside the country: Eastern Europe (242 percent), the Middle East (160 percent), Africa (150 percent) and Central America and South America (105 percent).
The company’s export sales volume increased 136 percent.
The domestic market continues to represent nearly 99 percent of the revenue of the company, according to calculations based on the data in the report.
For the year 2019, the company expects that political and economic uncertainties will continue to affect the passenger vehicle market that could lead to a major slowdown in demand for automobiles. This would be added to other risk factors such as bigger competition between the companies in the sector with the arrival of new competitors, especially with the push for electric vehicles.
Geely added that it is seeking to increase the proportion of such vehicles significantly in terms of total sales in 2019, and plans to launch more competitive products in the segment.
In the longer term, the company said that the liquidity accumulated during the last few years will allow it to maintain its investment and respond to the bigger changes in the market that are expected, and expects to be in a good position to sell more vehicles when the domestic market begins to recuperate.