(Oct 29): Geely Automobile Holdings Ltd’s third-quarter performance failed to convince investors concerned about a worsening outlook in the Chinese manufacturer’s main export markets.

The carmaker on Thursday reported rising sales and profit in the period, benefiting from a surge in exports. But fresh trade hurdles hamper prospects for future sales abroad.

Geely is among automakers trying to sidestep cut-throat pricing competition in China. Cut off from the lucrative US market, much of their expansion has focused on Europe. Now authorities there are preparing to limit Chinese hybrid imports in a move that’s expected to curb growth for Geely and its peers.

Sentiment in the auto industry is “fairly negative,” said Bloomberg Intelligence analyst Joanna Chen. While it’s unclear how the hybrid cap will be implemented, the development casts a pall on Geely’s future European expansion plans, she added.

Geely shares declined as much as 4.7% in Hong Kong, reversing earlier gains. They’re down nearly a quarter this year.

“From the stock price, it’s obvious that everyone wasn’t satisfied with the earnings report,” Geely executive Gui Shengyue said during an earnings briefing.

Geely’s third-quarter net income of 4.84 billion yuan (RM2.95 billion) was below analyst projections, he added. “The past three months, the competition that we’ve faced is one that we’ve not had in the previous two years,” Gui said.

The company’s exports surged to 323,442 vehicles in the three months through September, accounting for roughly 40% of total sales, according to earlier statements. Overseas shipments are expected to reach one million units this year, said chief financial officer Dai Yong, up nearly 9% from a previous goal of 920,000.

But in China, billionaire Li Shufu’s auto empire has been grappling with a prolonged price war in a market that’s projected to shrink by more than a fifth year this year.

Geely’s overall sales have been falling behind those of incumbent BYD Co, while competition in Europe from Chinese peers including Chery Automobile Co is intensifying. BYD enjoys early mover’s advantage in Europe but Geely is catching up, Gui said.

Geely supports the EU’s agreement with China to limit hybrid exports as it furthers trade relations, chief executive officer Gan Jiayue said during the briefing. The company can tap an existing relationship with Swedish-origin sister brand Volvo Car AB or a joint venture with Ford Motor Co in Spain to help grow its European business, he added.

And to open fresh revenue streams, Geely plans to expand to Canada in 2027 and grow volumes in additional regions including Latin America. 

Uploaded by Evelyn Chan