Geely jumps to nine-year high on Goldman Bond sale

Geely Auto more than doubled first-half profit to 595.9 million yuan (US$87 million) after raising its stakes in carmaking ventures and adding larger, pricier models. Vehicle sales rose 21 percent. The company was ranked ninth among China carmakers overall last year in terms of sales. It's slipped out of the top 10 this year.

Nationwide auto sales may jump 28 percent this year to 12 million, according to a state forecast, as government subsidies and tax cuts spur demand. U.S. vehicles sales will likely be around 10.5 million, according to General Motors Co., the nation's biggest carmaker.

BYD, Buffett

BYD, the maker of the F3, the bestselling car in China this year, has jumped more than fivefold since agreeing to sell a 10 percent stake to a Berkshire Hathaway Inc. unit last year. The Goldman backing may also boost Geely's shares.

“There's a psychological impact,” said Vivien Chan, an analyst with SinoPac Securities Asia Ltd. “A major fund investing in Geely will send a signal that the market has a positive expectation.”

Geely's parent Geely Holding Group Co. is looking at an offer for Ford Motor Co.'s Volvo unit, possibly in partnership with a Chinese state investment company, Geely Auto Chief Executive Officer Gui Shengyue said Sept. 8.

Overseas Push

A Volvo deal may help Geely meet founder Li Shufu's target of getting 66 percent of sales from overseas by 2015 compared with 5 percent in the first half. Geely earlier this year unveiled the EC718 sedan, its first model specifically designed for Europe. The car, priced from 80,000 yuan to 120,000 yuan domestically, still needs to win certification to be sold in Europe.

Geely has also bought a stake in Manganese Bronze Holdings Plc and set up a Shanghai venture with the London-cab maker that is shipping cars to countries including Saudi Arabia, Turkey and Spain. The company purchased the key assets of Australian gearbox maker Drivetrain Systems International earlier this year, gaining technology for making automatic transmissions.

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