China’s Geely Automobile flags costs, chip shortage after 12% drop in 2021 profit

SHANGHAI, March 23 (Reuters) – Geely Automobile Holdings Ltd (0175.HK) 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 AG , 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.

Geely Automobile is targeting 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.

China’s auto 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 and rising raw material prices, which have been exacerbated by supply chain disruptions following Russia’s invasion of Ukraine.

Russia calls its actions in Ukraine a “special operation”.

($1=6.3678 Chinese yuan)

Reporting by Brenda Goh; Editing by Subhranshu Sahu