Geely Automobile Holdings on Tuesday (23 March) announced a joint venture with its parent group for electric vehicles (EV) and a new brand called Zeekr but its shares fell over 6% on news its 2020 profit dropped by a third, a media report said.

Geely Automobile sold 1.32m cars last year, down from 1.36m in 2019, as auto sales in the world’s biggest market was hit by the COVID-19 pandemic, Reuters noted.

Overall auto sales in China fell 1.9% to 25.3m vehicles in 2020, according to industry data.

Geely Automobile also said on Tuesday it and its parent group will form a joint venture for electric vehicles (EV) and launch a new brand called Zeekr, and its profit fell 32% last year.

In a stock exchange filing cited by Reuters, Geely Automobile said the venture would work on research and development, purchase and sale of smart electric vehicles under the Zeekr brand.

Geely Automobile and parent Zhejiang Geely Holding Group will jointly invest CNY2bn in the new venture. Geely Automobile will own 51% of the new company, it said.

Hangzhou-based Geely Automobile, highest-profile Chinese automaker in the world due to the parent group investments in Volvo Cars and Daimler, posted 2020 profit of CNY5.53bn (US$850m), versus CNY8.19bn in 2019.

One analyst expected Geely to post a profit of CNY4.02bn, according to Refinitiv data. Revenue fell 5% from the previous year to CNY92.11bn.

It expects to sell 1.53m cars this year, Reuters said.