(Yicai Global) Jan. 8 -- Shares in Geely Automobile Holdings dived 11.3 percent today after the Chinese carmaker lowered its sales target for this year.

Its share price [HKG:0175] closed at HKD10.22 (USD1.3) after opening 8 percent down, sending its stock price to a year-and-a-half low.

Geely set its 2019 sales target at 1.51 million vehicles, down 4.4 percent from its goal last year -- which it failed to achieve. The Zhejiang-based manufacturer sold 1.5 million units in 2018, a 20 percent annual gain but 5 percent shy of its 1.58 million goal, the company said in a filing to the stock exchange yesterday. Sales in December fell 39 percent on the year and 34 percent on the month to 93,333.

"The numbers are not the most important thing for us," Lin Jie, vice president and general manager of sales, told Yicai Global in an interview.

Geely is not the only carmaker in China who missed the mark in 2018 as the world's biggest auto market fell into a slump. Passenger car sales were down 4.3 percent at 20.5 million in the 11 months through November, according to data from China Passenger Car Association, making a full-year decline almost inevitable.

Geely began to focus on stable development early last year after racking up 1.2 million sales in 2017, Lin added, saying that continuous improvement is key as the market turns down, rather than the absolute sales figure. If the market continues to slow down this year, selling 1.5 million cars again would be a victory, he said.

Onwards and Upwards

The firm's plans for this year involve improving the health of its sales channels to enhance efficiency while stabilizing profit, Lin continued.

"If the market is volatile, a healthy sales channel could help boost sales quickly once the market picks up slightly," he said, adding that Geely will axe its 200 poorest performing dealerships to optimize its sales network, leaving it with around 800. The company will also stick to its usual prices and avoid engaging in any wars, Lin said.

It will also look to adjust how it sells some of its models. The firm has broadened its vehicle range over the past three years and has lost track of its core product creation, according to Lin. "Some models will be distributed via e-commerce or other sales platforms rather than the usual channels," he said, adding that Geely hopes to explore the potential of products in a range of market segments.

Geely also hopes to shift more of its electric vehicles in 2019 after entering the sector last year and shifting 68,549 units. The firm plans for 90 percent of its sales to be electric vehicles by 2020, so will need to accelerate development in the field if it hopes to meet that target.

It already expects to introduce electric versions of all new models coming out this year, and will include 48 volt hybrid systems in all new cars, Lin said, adding that the firm has restructured to make Geely New Energy Automobile independent of the Geely marque.

Editor: James Boynton