Chinese auto maker Geely Automobile Holdings Ltd. (0175.HK) said Monday its net profit for 2009 rose 35% because of strong growth in vehicle sales, and reiterated that its parent company plans to eventually inject Volvo Cars into the listed firm after buying the unit from Ford Motor Co. (F).
Geely Automobile's net profit for the 12 months ended Dec. 31 rose to CNY1.18 billion from CNY879.05 million a year earlier. Revenue more than tripled to CNY14.07 billion from CNY4.29 billion, after the company nearly doubled its stakes in five car-making ventures in July 2008.
China replaced the U.S. as the world's biggest auto market last year, when sales in the country soared nearly 50% to 13.6 million as the government introduced measures to encourage auto purchases in the aftermath of the global financial crisis. Zhejiang-based Geely benefited from these measures, which helped boost car sales by 59% to 325,413, exceeding its target of 250,000 units for the year.
The company is targeting sales of 400,000 units for 2010, up 22% from 2009, with Geely Automobile Chief Executive Gui Shengyue saying he is confident the company will meet its "conservative" target, fueled by the nation's continued economic boom. The company sold 102,838 cars in the first quarter, up 68% from a year earlier, and 26% of its full-year target.
Geely Group is China's largest privately owned auto maker by sales. Geely Group injected nearly all its stake in the company's core car-making operations into the listed unit in 2008.
Gui said Monday the company has no plans to raise funds to support Geely Group's acquisition of Volvo Cars, and the company will consider acquiring the assets from its parent at "an appropriate time."
Gui said injecting the Volvo unit into the Hong Kong-listed firm remains the parent's ultimate goal, but added no time table has been set.
Gui said Geely Group has secured funding for the US$1.8 billion Volvo acquisition.
"As far as I know, Geely has secured the funds for the deal, which should be completed in the third quarter this year," Gui said.
Geely recommended a 2009 final dividend of HK$0.023, up from HK$0.016 the previous year.