Geely hit as auto demand falls

Geely Automobile Holdings, whose parent owns Volvo Cars, fell to its lowest in almost two years in Hong Kong trading after saying demand for vehicles in China is showing signs of slowing. Geely dropped 6.1 per cent to HK$2.15 at the 4pm close, the lowest since October 5, 2009, and extending this year's decline to 37 per cent. The benchmark Hang Seng Index gained 0.5 per cent. The automaker's shares dropped even after reporting first-half profit yesterday that beat analysts' estimates. Inflation and economic policy tightening in the world's second-biggest economy pose "significant" threats, and demands for sedans in the country is "slackening", Geely said in a statement yesterday. "We are concerned about Geely's performance in the second half as China's overall vehicle sales growth has been falling at a faster pace than the market expected and it will hit local automakers harder than the joint ventures," said Harry Chen, an analyst with Guotai Junan Securities Co in Shenzhen.