Chip Supply Stalls Disrupt Geely Automobile Sales

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Chip Supply Stalls Disrupt Geely Automobile Sales


Chinese automaker Geely Automobile Holdings Ltd said rising raw material prices and a shortage of global chip supplies will have an impact on profitability and sales this year. Last year, Geely's profit slumped 12%.

As quoted by Reuters, China's most famous carmaker in the world thanks to its investments in Volvo Cars and Daimler posted a profit of 4.85 billion yuan, or about US$761.64 million in 2021.

This profit was modest compared to 5.53 billion yuan a year earlier. Meanwhile, revenue rose 10% to 101.6 billion yuan.


"Increased competition in the Chinese market, rising raw material prices, disruptions related to the pandemic, and signs of a global chip supply shortage showing no signs of improving will continue to weigh on the group's sales performance and profitability in 2022," Geely Automobile said in a statement. as reported by Reuters, Friday (25/3).

Geely Automobile targets this year's vehicle sales to rise 24 percent to 1.65 million vehicles. Geely is also seeking to expand export sales to new markets in Southeast Asia, the Middle East and Western Europe.

Auto sales in China grew last year, helped by a surge in sales of new energy vehicles. But automakers warned of the impact of a global semiconductor shortage and rising raw material prices, which were exacerbated by supply chain disruptions following Russia's invasion of Ukraine.


Geely Auto Group CEO Jerry Gan said the company's reliance on specialty chips and a global supply chain meant that the shortage of semiconductors had a sizeable impact on production. Geely will use an internal chip to solve this problem.


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