Geely Automobile’s profit climbed on the back of an ongoing discounting campaign that turbo-charged sales even as China’s regulator has stepped up scrutiny on price wars.
Net income rose 59% in the three months ended Sept. 30 from a year earlier to 3.8 billion yuan (R9.1 billion), the company said Monday.
Revenue grew 27% to 89.2 billion yuan (R215 billion), driven by a 43% jump in vehicle deliveries.
Automakers in China have been locked in a discounting spiral because of overcapacities.
While Chinese authorities have tried to rein in unreasonable price cuts, Geely and peers have persisted with offering different forms of incentives to stimulate sales.
The 2026 refresh of the Galaxy E5 electric sport utility vehicle, which comes with better software and a longer range battery, has the same price — 109,800 yuan (R264,921) — for the base version.
Geely’s Hong Kong-traded shares were down about 2% on Monday, while the Hang Seng Index fell nearly 1%.
Uncertainties facing Geely and the industry next year include the long-running price war and the winding back of a national trade-in subsidy.
While orders from regulators to pay suppliers faster have put pressure on cash flow.
“People haven’t been positive about auto stocks mostly due to the many uncertainties in the coming year,” Geely Chief Executive Officer Gui Shengyue said in an earnings call, referring to authorities’ plans to scale back subsidies.
In early November, Geely launched a rebate of up to 15,000 yuan (R36,191) to make up for the scaling back of an electric vehicle purchase tax break from the start of 2026.
The company isn’t the only one to have done so, with at least half a dozen other brands such as Xiaomi and Li Auto also rolling out similar perks to lure customers.
Geely’s robust performance contrasts with BYD, its biggest rival, which has seen profit slump in the past two quarters.
The gap in China sales between the two has narrowed as Geely’s deliveries surged more than 50% in the first nine months of the year on hit models such as the Xingyuan hatchback, China’s best-selling model. BYD’s domestic sales grew 5%.
With potentially more consolidation of the industry next year, companies like Geely with a strong history in auto production, healthy profitability and cash flow are in a good position to survive, Gui said.
Geely continues to streamline its network of businesses to focus on rivals including BYD and Xiaomi in China’s ultra-competitive auto market.
This has including the delisting of sister premium EV brand Zeekr from the New York Stock Exchange, pending final approval from China’s authorities.
Hong Kong Stock Exchange has not yet approved a HK$2.3 billion (R5 billion) stock buyback the company proposed in October due to the fluctuations the plan may cause to the share price of Geely Automobile and in turn affect the Zeekr privatization.
The buyback plan is expected to be approved once the delisting is completed, Gui said.
While momentum at home is strong, Geely’s exports are under pressure from plummeting sales in Russia, where spending has weakened and authorities have hiked a fee on car imports.
Overseas shipments fell 7% through September, according to an earlier stock exchange filing.
But the company is ramping up expansion into other markets, such as the UK and Brazil, where it has formed a joint venture with Renault to make cars for the South American market.
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