China Geely on track to meet target
HONG KONG (Reuters) - China's Geely Automobile Holdings Ltd (0175.HK) should reach its 2010 sales target, but expects growth in the broader market to moderate next year as Beijing moves to cool the economy, its executive director said.
Steered by Chairman Li Shufu, dubbed the Henry Ford of China, Geely previously said it aimed to sell 400,000 units in 2010, and Executive Director Lawrence Ang said the company was on track to reach that goal.
Ang told Reuters that Geely would launch three new models this year to be delivered next year. With a total capacity to produce up to 680,000 cars a year, the company was well prepared for growth, he said.
"We are quite confident that next year will be easier for us to achieve higher volume because we have more new models," Ang said.
He forecast auto sales growth in China, the world's largest market, would slow to 15 percent next year after strong growth of about 30 percent this year and 40 percent in 2009.
China passed the United States last year to become the world's largest auto market, after Beijing launched a raft of policy measures including auto-buying incentives, to boost spending during the global downturn.
Sales have continued to be strong this year, but many predict the numbers will slow considerably in 2011 after a recent series of monetary tightening measures by Beijing.
Geely's parent, Zhejiang Geely Holding Group, also made headlines in August when it closed its deal to buy Sweden's Volvo Car Corp from Ford Motor Co (F.N).
This week Geely said a committee was recently set up to facilitate communications with Volvo.
"The committee will meet at least twice a year and I would like to see the two companies join forces to make something new, to create synergy," Ang said.
Shares of Geely have risen about 17 percent this year, outperforming U.S. billionaire Warren Buffett-backed domestic rival BYD Co Ltd (1211.HK), which is down 30 percent.
The rally followed a near seven-fold jump last year on bullishness about the Volvo purchase and an investment in the company by Goldman Sachs (GS.N).
Geely is hoping to keep its growth going next year in part by introducing more cars with automatic transmission. Some 95 percent of its cars now have manual transmission, which has put a damper on growth as about 40 percent of cars now sold in China have automatic transmission, Ang said.
To tackle that shortfall, Geely last year took over Australian gearbox maker Drivetrain Systems International, which is building three plants in China with combined eventual capacity of 900,000 gear boxes a year.
"I think by mid-next year all our major products can be equipped with automatic gear box made by DSI," Ang said.
(Reporting by Alison Leung; Editing by Ken Wills)
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