Geely Predicts Slower Sales Growth After Missing 2013 Target
Geely Automobile Holdings Ltd. (175), the Chinese automaker whose parent owns Volvo Cars, predicted its sales growth will slow this year to less than half the pace of 2013 and trail the industry in the world’s largest auto market.
Deliveries will climb by about 6 percent to 580,000 units, the Hong Kong-based company said in a statement to the city’s stock exchange yesterday. The automaker boosted sales by 14 percent to 549,518 units last year, missing its own 560,000 target. The China Association of Automobile Manufacturers forecast industry demand will expand by 8 percent to 10 percent.
“It’s a surprise to see that they set a target lower than the market average.” said Vivien Chan, a Hong Kong-based analyst with Oriental Patron Securities Ltd. “The target they set for this year seems way too conservative.”
Geely’s sales prediction follows Great Wall Motor Co. (2333)’s decision to delay the introduction of its most expensive sport utility vehicle by three months to fix technical deficiencies. Chinese automakers have seen their combined market share at home fall as exports dropped for the first time in five years because of unstable overseas demand and insufficient competitiveness, according to the auto association.
The automaker’s shares have declined 11 percent since Jan. 1 in Hong Kong trading after gaining 2.2 percent last year. The stock fell 2 percent to close at HK$3.34 yesterday.
Geely has said that it plans to start exporting cars that it develops with Volvo Cars to the U.S. in 2016, a decade after founder Li Shufu first set the goal.
“In 2014, the group would continue to focus on improving its product quality, after-sales services and average selling price of its products,” Geely said in the statement.
China became the first country to see domestic sales surpass 20 million units a year in 2013. Deliveries will rise as much as 10 percent in 2014 after last year’s 14 percent growth, the state-backed auto association said this month.
The automobile market will see slower growth this year as anti-pollution and austerity campaigns spread, according to the industry group.
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