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Chinese carmaker Geely Automobile Holdings Ltd. reported first-half profit that missed analyst estimates as sales declined due to Covid lockdowns and supply chain disruptions.
Net income slumped 35% to 1.55 billion yuan ($228 million) in the six months ended June 30 from a year earlier, Geely said on Thursday, significantly lower than 2.77 billion yuan expected by analyst in a Bloomberg survey. Revenue increased 29% to 58.2 billion yuan, beating the estimated 53.2 billion yuan.
Geely, China’s highest-profile automaker globally due to the group’s investments in Volvo Cars and Mercedes-Benz, said its vehicle sales, which fell 9% in the first half, were below management expectations, citing the COVID-19 curbs and shortages of semiconductors.
China’s auto sector has been hit hard by government efforts to combat COVID-19, with many areas including the commercial hub of Shanghai under lockdowns of varying lengths. Authorities have tried incentives to revive demand, and the central government has halved purchase tax to 5% for cars priced at less than 300,000 yuan ($45,000) and with engines no larger than 2.0 litres.
Sales of its new energy vehicles (NEV), including both pure electric and plug-in hybrids, increased nearly fourfold in the first six months, while one out of five vehicles Geely sold in the period were electric, it said.