China’s Geely says sales fall over Ukraine, Mideast conflicts
AFP
HANGZHOU, Zhejiang—China’s automaker Geely says its sales fell as the global market gets jittery amid wars in Ukraine and the Middle East.
Prices of fuel rose as a result of conflicts in oil-producing regions, prompting customers to defer plans to buy new cars, said Ash Sutcliffe, public relations officer of Geely Holding Group Co. Ltd.
Geely posted a 20 percent decline in net profit for the first half of 2014, from $227.5 million for the January-June period last year to $180.6 million for the same period this year. A total of 187,296 vehicles were sold this year, down by 29 percent from the same period last year.
Supply disruptions
The Geely Panda (Photo by Dennis Maliwanag/INQUIRER.net)
Russia, which has been accused of backing separatist rebellion in Ukraine, relies on Soviet-era pipelines passing through Ukraine to meet 15 percent of Europe’s fuel demand. The European Union, together with the United States, has imposed sanctions targeting, among others, Russia’s largest oil producer Rosneft.
Conflicts in Libya, Yemen, Sudan Iraq and Syria cause supply disruptions too, driving fuel prices up. Geely also has assembly plants in Ukraine, Russia and Iraq.
Chinese cars era
Geely, which acquired Swedish Volvo Cars from Ford in 2010, is counting on exports to fast developing Southeast Asian nations to boost sales, Sutcliffe said.
Sutcliffe offered assurances that China’s first multinational company continually seeks to improve the quality and safety of its vehicles.
He said the perception of China products as substandard has changed, adding that the global market was initially reluctant to try Japanese and Korean cars as well.
“We’re now very much in the era of Chinese cars,” Sutcliffe said.
The London Taxi vehicle. (Photo by Dennis Maliwanag/INQUIRER.net)
Geely, headquartered in Eastern China’s Hangzhou City, has 10 car models in its portfolio and a full series of engines from 1.0L to 2.4L.
China’s automobile market is the world’s biggest and industry analysts say local brands are falling out of favor.
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