Geely Auto profit climbs as exports counter weak China demand

Geely Automobile Holdings reported a 36% increase in profit for the second quarter, meeting analysts' expectations, as strong exports helped the company navigate weaker demand in China. Net income reached 4.9 billion yuan ($727 million) for the quarter ending June 30, matching the average estimate of 4.9 billion yuan compiled by Bloomberg. Revenue increased by 15% to 89.8 billion yuan.

However, the company's half-year profit declined by 1.8% to 9.09 billion yuan, surpassing estimates. Geely's exports more than doubled in the first half to 474,228 vehicles, which helped offset some of the slowdown in domestic sales. Chinese car sales in the first six months dropped by 20%, with the Passenger Car Association predicting a 14% contraction for the entire year.

BYD, the world's largest EV maker, gained an early advantage due to higher oil prices caused by the US-Iran war, eroding Geely's lead. Over the first six months of the year, Geely's overseas sales reached 812,700 cars, nearly double the volume of its exports. Despite selling fully electric vehicles and hybrids, Geely has been slower than BYD in establishing an overseas distribution network and is now catching up.

In July, Geely reached an agreement with Ford Motor to share capacity and produce vehicles at Ford's underutilized Valencia plant in Spain. The company is set to begin local production of its EX5 compact crossover and EX2 subcompact hatchback through a joint venture with Renault SA in Brazil.