Geely Automobile, China's second-largest electric-vehicle maker, recorded slightly lower net profit in the first half despite a surge in overseas sales, dragged by weaker demand in its home market.
Net profit fell 1.8% to 9.09 billion yuan, equivalent to $1.35 billion, in the first six months of the year, the Hangzhou-based company said Monday. Revenue rose 15% to 173.60 billion yuan.
Geely sold 1.42 million vehicles during the period, up about 1% from a year earlier, supported by a more than doubling in overseas deliveries to 474,288 units. Exports in June topped 100,000 units for the first time, underscoring the carmaker's increasing reliance on overseas markets for growth as China's auto market, the world's largest, slows.
Stronger sales of higher-margin premium products and export products helped push gross profit margin 1.6 percentage points higher to 17.9%, while the average vehicle selling price increased to 112,000 yuan, the company said.
New-energy vehicles, including plug-in hybrids and battery EVs, accounted for more than half of Geely's total deliveries in the first half. Zeekr was a key growth driver, with sales for the period nearly doubling from a year earlier, while the company's other major brands faced weaker demand in China.
The results come as the Chinese automaker is stepping up its push into Europe, recently entering a manufacturing partnership with Ford. Geely will build two electric SUVs at Ford's factory in Spain, and the two companies will jointly develop a new model.
Analysts said the joint venture gives Geely a relatively low-cost route to localize EV production.
Describing the deal as a landmark breakthrough for Geely in its European expansion strategy, Citi analysts said in a note that it allows the Chinese carmaker to tap existing manufacturing infrastructure and supply chains while potentially reducing the impact of European Union tariffs on 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, according to Citi estimates.