Company profile Geely Automobile Holdings Ltd (GELYF otc) Small Trades Journal

12 Май 2014 | Author: | Комментарии к записи Company profile Geely Automobile Holdings Ltd (GELYF otc) Small Trades Journal отключены
Geely Emgrand EC9 Electric Cars

Small Trades Journal

Company profile, Geely Automobile Holdings Ltd, (GELYF: otc)

[Table of Annual Sales was updated on 3/4/2014]

Summary

Geely Automobile Holdings Ltd ( Geely ) earns a profit in China and other foreign markets by converting raw materials to finished passenger vehicles.  Geely sells 3% of all new automobiles sold in China and exports a small number of automobiles to foreign markets.  The Company’s competitive advantages are (1) ownership of the Volvo brand name and (2) ownership of its supply-chain of parts.

  Geely’s ‘penny stock’ is a speculative investment that pays a small annual dividend and potential capital gains; but, be prepared for a loss from investing in the risky Chinese auto market.

Business overview

Geely is a holding company in Hong Kong that operates 2 business segments   automobiles and gearboxes  among 5 Chinese companies and 1 European company ( Volvo Car ).  Four brands of Geely automobiles (GLEagle, Englon, Emgrand, Volvo) have independent distribution and service networks.  Geely owned 1,822 technology patents in 2010 (Volvo excluded).   Geely’s customers are the middle class Chinese society where households with monthly incomes limited to $1,000 USD are twice as likely to purchase a Chinese brand car as households with higher incomes.

Operations

Geely’s RD, production, sales, and service are performed by subsidiary companies.  During 2010. Geely owned 8 manufacturing plants in China and employed 17,102 workers (Volvo excluded).  The plants were fully integrated to build auto bodies, make power trains, assemble cars, and paint cars.  Five percent of the Chinese built cars were exported to markets in the Middle East, Eastern Europe, and Central/South America.

  The 2010 annual production capacity was 560,000 units per shift, with plans to expand to 2 million units by 2015.  The Company complies with government regulations for emission standards, fuel efficiency, and other issues.  Geely owns DSI’s gearbox manufacturing plant in Australia, which builds and supplies automatic transmissions to original equipment manufacturers.  DSI will expand its production to factories in China with a 2011 goal of 300,000 gearboxes per year.

  Geely has a majority stake in the LTI taxi manufacturing plant in Shanghai.  The 2011 goal is a sales volume of 3,000 units.  The LTI enterprise operates at a net deficit.

Volvo China’s operations are headquartered in Shanghai and executed in 1 manufacturing plant through a joint venture with Ford Motor Co.  Future operations will be incorporated into Geely’s plans to build 2 new manufacturing plants in China.  Volvo Europe’s operations will continue under the distant oversight of Geely.

Growth strategy

The corporate vision is to become a leading supplier of the safest, most energy-efficient vehicles in the World by implementing the following strategy:

Use RD to narrow the technology gap between Geely and major international companies

Strengthen Geely s brand image and competitiveness

Expand Geely s manufacturing capacity and sales networks

During 2011, introduce SUVs and install automatic transmission in all new models

Industry

The Chinese automobile manufacturing industry is fragmented and experiencing a price war among manufacturers.  The industry is challenged by these competing forces:

Government subsidies for new cars and fuel efficiency

Geely Emgrand EC9 Electric Cars

Government taxes and licensing fees to control traffic congestion, etc.

Low-income demand for small cars and high-income demand for luxury cars

Customer preference for foreign brands (VW, BMW, GM, etc)

Rising cost of ownership (e.g. high gasoline prices)

Emerging sales of used cars

Uncertainty of the global economy


Rising prices of steel/raw materials, which will lower the profit margin

Inflation and tightening monetary policies in China

New car sales are sensitive to government subsidies, which are declining, and various fees, which are rising.  For example, city traffic congestion may cause imposition of countermeasures (licensing quotas, etc.) in at least 24 cities where combined sales accounted for 34% of total car sales in 2009.  The emerging sales of used cars now comprise nearly 20% of total car sales in China.

  Since Chinese consumers prefer western brands, the used car sales market threatens the new car sales of Chinese brands.

Market position

Annual Sales of Passenger Vehicles (PVs)

Geely Emgrand EC9 Electric Cars
Geely Emgrand EC9 Electric Cars
Geely Emgrand EC9 Electric Cars
Geely Emgrand EC9 Electric Cars
Geely Emgrand EC9 Electric Cars
Geely Emgrand EC9 Electric Cars

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