Geely Automobile Holdings expects rising raw material prices and global chip shortages to pressure its profitability and sales this year, the Chinese company said on Wednesday, after posting a 12% fall in 2021 profit.
The world’s highest-profile Chinese automaker, thanks to its investments in Volvo Cars and Daimler, posted 2021 profit of 4.85 billion yuan ($761.64 million), compared with 5.53 billion yuan in the previous year.
Revenue rose 10% to 101.6 billion yuan.
“The intensified competition in China, the rise in raw material prices, other pandemic-related disruptions and global shortages of chip supply have showed no signs of subsiding and should continue to put pressure on the sales performance and profitability of the group in 2022,” Geely said in a statement.
Geely Automobile is aiming to sell 24% more vehicles this year, at 1.65 million vehicles, saying it would look to further expand its export sales to new markets in Southeast Asia, the Middle East and western Europe.
The company also recommended payment of a final dividend of HK$0.21 per ordinary share.
China’s car sales grew last year, helped by surging sales of new energy vehicles, but industry executives have warned about the impact of a global shortage of semiconductors.
Rising raw material prices have also been an issue, and they have been exacerbated by supply chain disruptions following Russia’s invasion of Ukraine.
- Reuters, with additional editing by George Russell
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