Geely, Chery, BYD report double-digit profit drops as China's reduced purchase tax incentives weigh on domestic sales

Lead

Chinese carmakers Geely Automobile Holdings, Chery Automobile and BYD, the most profitable listed Chinese carmakers last year, all reported double-digit declines in first-quarter net profit, according to South China Morning Post. The reports highlight a squeeze at home as reduced purchase incentives weigh on domestic sales.

BYD, the mainland's largest and most profitable EV maker, reported a net profit of nearly 4.09 billion yuan (US$590 million) for the January-March period, a drop of 55 per cent compared with a year earlier, the newspaper reported. Revenue came in at 150.2 billion yuan, down 11.8 per cent from a year earlier. The first-quarter revenue was the lowest quarterly figure since the April-June period of 2024, while net profit was the least since the first quarter of 2023, as slowing growth at home weighed on earnings.

Geely, the country's second-largest carmaker behind BYD, said in a filing that its net profit for the period slid 27 per cent year on year to 4.17 billion yuan (US$610 million), as reported by South China Morning Post. The profit slump came even as growth in exports and sales of high-end models boosted revenue by 15 per cent to 83.8 billion yuan, an all-time high for the period.

Coverage comparison

South China Morning Post covered the financial results of both BYD and Geely, as well as mentioning Chery Automobile's profit decline. Both articles focused on the impact of reduced purchase tax incentives on domestic sales, with the BYD report emphasizing the role of exports in offsetting domestic weakness, and the Geely report highlighting the squeeze at home amid the phasing out of incentives. The newspaper's reporting was neutral in tone, with direct attribution to company statements and earnings calls.

Key claims

• BYD's first-quarter net profit was 4.09 billion yuan, down 55 per cent year on year, as reported by South China Morning Post.
• BYD's revenue was 150.2 billion yuan, down 11.8 per cent year on year, as reported by South China Morning Post.
• BYD exported 120,083 units in March, marking the fifth consecutive month with shipments of more than 100,000 vehicles, as reported by South China Morning Post.
• Geely Automobile Holdings' net profit declined 27 per cent year on year to 4.17 billion yuan, as reported by South China Morning Post.
• Geely's revenue increased 15 per cent year on year to 83.8 billion yuan, an all-time high for the period, as reported by South China Morning Post.
• Geely's total sales volume for the quarter inched up only 1 per cent from a year earlier to 700,940 units, as reported by South China Morning Post.
• Chery Automobile and BYD also reported double-digit declines in net profit in the first quarter, as reported by South China Morning Post.
• The phasing out of purchase tax incentives has not yet led to a recovery in sales volume in the domestic market, a claim attributed to Gui Shengyue, Geely's CEO, during an earnings call, as reported by South China Morning Post.

Context

Chinese electric vehicle buyers were exempt from the country's 10 per cent vehicle sales tax last year, but are now paying a 5 per cent levy, with the tax set to return to the full 10 per cent rate in 2028. This has contributed to the slowdown in domestic sales, though exports have helped cushion the impact for some carmakers.