Geely Auto's Exports Cushion Weak Chinese Demand as Profit Slips — Update

By Jiahui Huang

Geely Automobile's net profit fell slightly in the first half, though strong overseas sales and a better product mix helped the carmaker improve margins amid weaker auto demand in China.

China's second-largest electric-vehicle maker, like many of its peers, has faced subdued consumer demand and intense competition in the world's biggest auto market, leading many in the industry, including Geely, to look abroad for growth.

The strategy appears to be working well for the Hangzhou-based company, whose exports topped 100,000 units for the first time in June. In the first six months of the year, Geely more than doubled overseas deliveries to 474,288 units, helping sales grow 1% overall to 1.42 million vehicles.

The company's margins have also improved as a result. The carmaker said stronger exports and sales of premium models pushed gross profit margin up 1.6 percentage points to 17.9% for the first half, with the average vehicle selling price rising to 112,000 yuan, or about $16,610.

New-energy vehicles, including plug-in hybrids and battery EVs, accounted for more than half of Geely's total deliveries during the period. Zeekr, its luxury EV brand, was a key growth driver, with sales nearly doubling from a year earlier.

For the first six months of 2026, net profit fell 1.8% to 9.09 billion yuan, equivalent to $1.35 billion, though revenue rose 15% to 173.60 billion yuan, Geely said Monday.

Shares in the company ended 4.8% higher in Hong Kong after the earnings release. Citi characterized the results as "decent," saying in a note that Geely's earnings slightly beat expectations, supported by a stronger sales mix as Zeekr deliveries and exports increased.

As its overseas business grows, Geely has also stepped up its push into Europe, recently entering a manufacturing partnership with Ford. The Chinese automaker will build two electric SUVs at Ford's factory in Spain, and the two companies will jointly develop a new model.

Analysts said they view the 34%-Geely owned joint venture as a positive development, as it gives the Chinese automaker a relatively low-cost route to localize EV production.

Calling the deal "a landmark breakthrough" for Geely in its European expansion strategy, Citi analysts recently wrote that it allows the Chinese carmaker to tap existing manufacturing infrastructure and supply chains while potentially reducing the impact of European Union tariffs on its China-made vehicles.

If Geely secures a 150,000-unit capacity at the Valencia plant, which has an annual capacity of about 400,000 vehicles, it could cost just 10% to 20% of building a new factory, Citi said.

Write to Jiahui Huang at jiahui.huang@wsj.com

(END) Dow Jones Newswires

August 17, 2026 04:45 ET (08:45 GMT)

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