BEIJING (Reuters) – China’s Geely Vehicle Holdings Ltd (0175.HK) on Monday mentioned 2020 could also be “amongst probably the most troublesome years” in its historical past, as stress stemming from the coronavirus pandemic on manufacturing and gross sales is prone to persist within the close to future.
FILE PHOTO: The logo of the Geely vehicle maker emblem is seen on the IEEV New Vitality Automobiles Exhibition in Beijing, China October 18, 2018. Image taken October 18, 2018. REUTERS/Thomas Peter
The automaker, primarily based within the jap province of Zhejiang, additionally mentioned decrease gross sales drove internet revenue down 35% in 2019 when the nation’s total auto market suffered a chronic stoop.
China’s most globally high-profile automaker – on account of father or mother Zhejiang Geely Holding Group Co Ltd’s investments in European producers Volvo Automobile and Daimler AG (DAIGn.DE) – posted revenue of 8.19 billion yuan ($1.15 billion).
That in contrast with the 9.14 billion yuan common of 33 analyst estimates, Refinitiv knowledge confirmed.
“The current outbreak of novel coronavirus had triggered severe disruption to our provide chain and thus our manufacturing ranges, that means further stress on our enterprise quantity and profitability in 2020,” Geely mentioned in a submitting to the Hong Kong trade.
The present headwind is prone to persist within the close to future, making 2020 most likely amongst probably the most troublesome years within the group’s historical past, Geely mentioned.
Income fell 9% from a 12 months previous to 97.40 billion yuan. Analysts had estimated 99.43 billion yuan.
Geely Vehicle bought 1.36 million vehicles in 2019 and goals to promote 1.four million vehicles in 2020.
Trade-wide auto gross sales fell 8.2% final 12 months, pressured by new emission requirements and the affect of Sino-U.S. commerce stress.
Geely Vehicle and Volvo – which Geely’s father or mother purchased from Ford Motor Co (F.N) in 2010 – are planning to merge and listing in Hong Kong and probably Stockholm. Volvo dropped a transfer to listing its inventory two years in the past.
A merger would come as world automakers pursue alliances to reply higher to the price of assembly harder emission guidelines, electrification and autonomous driving.
It might additionally come because the business worldwide begins to revive gross sales after governments halted enterprise exercise and imposed restrictions on motion to sluggish the unfold of the coronavirus, which has killed over 30,000 folks globally.
Reporting by Yilei Solar and Brenda Goh; Enhancing by Christopher Cushing