Geely to up capacity to 400,000 units by end-2007
Sep. 1, 2006 (China Knowledge) - Geely Automobile Holdings Ltd., a unit of the mainland's biggest privately- owned automaker, intends to increase its total capacity by 15% to 400,000 units by the end of 2007.
Geely Executive Director Lawrence Ang Siu-lun told a media briefing Thursday that the boost in production capacity will follow the completion of new production plants.
Ang believes that overall productions cost will also be reduced by as much as 10% when the production capacity peaks.
The Zhejiang-based company sold 8,347 vehicles in July - the weakest month this year - representing a 40% decline from June. July was the first month this year in which sales dipped below 10,000 units.
Ang was quoted in Hong Kong newspaper The Standard as saying: “I expect that the operating environment in China will remain tough in the next three months.” He also said that China's car industry has “hit a trough in the cycle".
Overinvestment in the fast-growing Chinese economy has resulted in Mainland automakers seeing lower profit growth. Therefore, the automakers are venturing overseas.
Geely is among a number of Chinese automakers like Chery and Great Wall that are exporting cars overseas. According to the Automobile Branch of the China Chamber of Commerce, China exported 34,506 sedans in the first half of 2006, up by 259.5% from the same period last year.
Geely has also indicated interest in new export markets such as the Middle East in order to boost revenues. The company exported 7,000 vehicles in 2005, mainly to Southeast Asia, and is aiming for 10,000 units this year.