HONG KONG -- Chinese automaker Zhejiang Geely Holding Group is moving ahead with plans to roll out models in Western Europe this year after missing its annual sales target amid setbacks at home, the company said Thursday.
Rising competition and weak consumer appetite for big-ticket items in China prompted Geely, one of the country's top private automakers and owner of Volvo Cars, to set a conservative sales target for 2019. It expects to sell 1.51 million vehicles this year, up marginally from last year.
But even flat growth figures would be a blessing to most carmakers in China, as overall sales of passenger cars fell 17.4% on the year in February after logging the first annual decline in almost three decades in 2018.
Against this backdrop, Geely, whose billionaire founder Li Shufu owns a big stake in Germany's Daimler, is taking overseas expansion more seriously than ever. About 98% of the Geely's sales were made in China as of the end of last year.
Geely will start rolling out models under its premium brand Lynk & Co., a joint venture between Geely and Volvo Cars, this year, group president An Conghui said at a news conference in Hong Kong on Thursday. He added that the Netherlands, Belgium, Germany, France, Italy and the U.K. will be among the first markets it plans to enter.
"I believe the international market will be a big help for Geely's earnings," An said.
Nikkei reported in February that Geely has plans to set up a design center in the U.K. led by a veteran of Jaguar Land Rover and Aston Martin. The facility will design Geely vehicles for Chinese market as well as models under its overseas brands including Malaysian affiliate Proton Holdings, British subsidiary Lotus Cars, and Lynk & Co.
The Lynk & Co.brand touts connectivity features, such as a built-in app that makes car sharing easy.
Meanwhile, Geely also has eyes on Southeast Asian markets, which have long been dominated by Japanese car brands such as Toyota Motor.
An said the company is encouraged by strong sales of its Proton X70 model in Malaysia, which was built in partnership with Malaysian national automaker Proton. The sport utility vehicle, adapted from Geely's best-selling Boyue Chinese SUV, immediately became the best-selling car in Malaysia since its launch in December, An said.
"We are very happy that we are already making money on our first car model in Malaysia," An said.
He said the company will launch two new models in Malaysia every year, and will sell them in other countries in Southeast Asia. Geely in 2017 acquired a 49.9% stake of Proton, who had operated at a loss for years.
But Au was less optimistic on the domestic outlook.
"The difficult situation [in China auto market] is very different from previous times," Au said. He noted prior slumps were the result of market cycles and sales would rebound soon.
"But now I am not sure," he said.
Despite worsening market conditions in the second half last year, Geely's annual net profit grew 18% to 12.67 billion yuan ($1.89 billion) in 2018. Unit sales rose 20% to a little over 1.5 million vehicles.
Its market share in China expanded to 6.2% from 5.0% during the period.