Geely Automobile Holdings Ltd., whose parent owns Volvo cars, posted a 13 percent gain in 2011 profit on Chinese demand for new vehicles.
Net income rose to 1.54 billion yuan ($244 million), or 0.19 yuan a share, from 1.37 billion yuan, or 0.17 yuan, a year earlier, Geely said in a statement in Hong Kong today. That beat the 1.47 billion yuan average of 21 analysts’ estimates compiled by Bloomberg.
China has stepped up efforts to help Geely and other local automakers facing increased competition from foreign rivals such as General Motors Co. and Volkswagen AG. The industry regulator has included 19 Geely models on its list of cars that government agencies can buy, shutting out overseas producers.
“Looking ahead, this year will not be particularly good because the pace of growth of vehicle sales is slowing in both China and the rest of the world,” Lawrence Ang, an executive director at Geely, said at a press conference in Hong Kong.
Shares of the carmaker climbed 3.8 percent to HK$2.99 at the close in Hong Kong trading, the biggest gain since March 7.
The market share of local-brand cars, excluding minivans, multipurpose vehicles and SUVs, fell 1.78 percentage points to 29.1 percent last year, according to the China Association of Automobile Manufacturers.
Geely’s vehicle sales rose 1 percent to 421,611 units in 2011, lagging behind the 5.2 percent gain of the passenger-car market in the country.
The carmaker expects to achieve this year’s sales target of 460,000 units, up 9 percent from the previous 12 months, Daniel Li, an executive director at Geely, said today.
Geely’s parent, Zhejiang Geely Holding Group Co., signed a memorandum of understanding this month with its unit Volvo Cars to transfer vehicle technology to establish a new brand and enhance competitiveness.
The company expects to start selling a new brand using Volvo technology in two years at the earliest, Chief Executive Officer Gui Shengyue said today. The new brand will be priced between 100,000 yuan and 300,000 yuan, he said.