Geely Automobile Holdings Limited released its 2026 interim results on August 17, posting revenue of RMB 173.6 billion for the first half, up 15.5% year-on-year and hitting a record for the period. However, net profit slipped 2.14% to RMB 9.09 billion, while non-GAAP net profit fell 15.0% to RMB 8.48 billion.

Dragged down by the Galaxy and Lynk & Co brands, Geely Auto completed only 40% of its full-year sales target of 3.45 million vehicles in the first six months, with the first seven months still showing less than half of the goal achieved. The weaker-than-expected sales performance has pushed inventory and inventory turnover days higher for several consecutive years, signaling not only a buildup of company stock but also mounting pressure on dealers to clear their own inventories.

As a key sales pillar, Geely Galaxy achieved just 33% of its first-half sales target, the lowest among all brands within the group. Among its models, the once-strong "dark horse" Xingyuan, a low-priced vehicle, has lost momentum, while flagship models such as the Galaxy M9 and V900, launched less than a year ago, have seen monthly sales hit new lows. The Galaxy brand, it appears, has become trapped in the low-end segment.

Following the interim results, Li Shufu made a rare leadership transition, yet the stock still fell for two consecutive sessions. How the company navigates this difficult period will be a major test for Geely in the post-Li Shufu era.

First-Half Sales Completion Rate Stands at Just 40%, Inventory and Turnover Days Keep Climbing

Geely Auto's interim report showed first-half revenue of RMB 173.6 billion, up 15.5% year-on-year, a record for the period, but net profit and non-GAAP net profit declined 2.14% and 15.0%, respectively. The company attributed the profit drop primarily to factors such as exchange losses.

By brand, Zeekr stood out as a rare bright spot, with first-half sales of 178,400 units, up 97% year-on-year. In contrast, both Galaxy and Lynk & Co saw declines: Galaxy sales fell 5% to 520,000 units, while Lynk & Co dropped 6% to 144,000 units. Amid intensifying competition in the overall auto market, the sluggish performance of these core brands has weighed heavily on Geely's overall sales, casting doubt on its ability to hit the annual target.

In the first half, Geely Auto sold a cumulative 1.423 million vehicles, up a mere 0.98% year-on-year. Against the full-year target of 3.45 million vehicles, the first-half completion rate was only 41.2%. This means the company must sell over 2 million vehicles in the second half, equivalent to an average of more than 338,000 units per month—a daunting challenge.

In July, Geely sold 250,200 new vehicles, showing little improvement. Through the first seven months, it achieved 48.5% of the annual sales target, still below the halfway mark.

Due to weaker-than-expected sales, Geely Auto's inventory stood at RMB 33.844 billion as of the end of June, up 25.8% year-on-year and marking the fifth consecutive year of growth since 2021. Inventory turnover days rose to approximately 42 days in the first half, up 16% year-on-year, continuing the upward trend seen in previous years.

The overseas market was the brightest part of the interim report. Geely's export sales reached 474,200 units in the first half, up 158% year-on-year, the highest growth rate among major Chinese automakers. Yet, even this surge in exports did not ease internal inventory pressure. During the first half, Geely's new vehicles, particularly fuel-powered models, faced sluggish end-market sales, and dealer inventories rose, making it difficult for the company to simply boost domestic wholesale volumes to offload production capacity. This is one of the key factors behind the continued increase in both inventory and inventory turnover days.

Beyond the dealer channel's need to destock, market analysts also suggest that Geely's aggressive overseas expansion is a double-edged sword. If overseas end-market demand shows signs of slowing, it could morph into another source of channel inventory pressure, potentially hitting Geely harder than its peers.

Geely Galaxy's Sales Completion Rate Drops to 33%, Flagship Models Hit New Lows, Brand Stuck in Low-End

Among Geely's brands, Galaxy's performance is the most concerning. As a key sales pillar for the group, Galaxy sold 520,000 units in the first half, down 5% year-on-year. Against its full-year sales target of 1.55 million vehicles, it achieved only about 33% in the first half—the lowest completion rate not only within the group but also among the worst in the industry.

By model, Galaxy has struggled across the board in low-, mid-, and high-end segments. The Xingyuan, priced under RMB 100,000 and once the best-selling single model in China in 2025, surpassing the Model Y and BYD Qin, has lost its luster in 2026. Facing fierce competition from rivals like Leapmotor's A10 and Wuling Bingo Pro, customers have been diverted in large numbers. Although monthly sales remain at a relatively high level of around 30,000 units, growth has clearly shown signs of fatigue.

While the low-end market weakens, Galaxy's attempts in the high-end segment have been a more thorough disappointment. The Galaxy M9, a flagship SUV priced at the RMB 200,000 level, faces pressure from both high-end plug-in hybrid and pure electric competitors. Terminal response has been tepid, and after just a few months of deliveries, sales have plummeted from a peak of around 10,000 units to just over 2,700 in June and below 2,500 in July. Many dealers have already resorted to limited-time discounts of RMB 10,000 to 20,000 to clear stock.

As Galaxy's flagship product aimed at the RMB 300,000-plus luxury market, the Galaxy V900 has suffered an even more severe setback since its launch. Terminal retail has been sluggish, with monthly sales falling to just over a hundred units—a state of near-frozen demand. Across many regions, dealers are now offering "direct price cuts of RMB 40,000" in desperate clearance sales, rendering the high initial pricing meaningless.

The repeated new lows in sales for the Galaxy M9 and V900 signal that Geely Galaxy is trapped in the low-end market, and its push upmarket has effectively failed.

After the interim results were disclosed, Geely Auto announced that, effective August 18, 2026, Li Shufu would resign as chairman and executive director of the board of Geely Automobile Holdings Limited, and would be appointed as lifelong honorary chairman, while continuing to serve as chairman of Zhejiang Geely Holding Group. An Conghui will take over as chairman of the board.

For this resignation, Geely officially cited "compliance with corporate governance requirements and the cadres' succession planning, and further improving the professional manager authorization and operation mechanism." At the results press conference, Li Shufu remarked, "The automotive industry is a marathon without an end; corporate succession and value orientation determine a company's ability to sustain development."

However, at a sensitive time when multiple indicators in the half-year report are under pressure, the founder's decision to hand over the helm of the core listed platform has inevitably sparked market speculation. This rare senior management change at Geely has been widely interpreted as a "defensive step-down" in the face of poor sales, inventory buildup, and brand infighting.

On the first trading day after the interim results and the management change announcement, Geely Auto's Hong Kong-listed shares fell 2.2% on August 18, followed by another 1.8% drop on August 19. As competition in the new energy vehicle market intensifies in 2026, whether Geely can achieve brand elevation and sales breakthroughs in the post-Li Shufu era remains to be seen in the market's assessment.