Geely Automobile Holdings has knocked 6% off its 2020 full-year sales outlook after recording a 43% drop in sales during the first half of 2020. The revised sales figure for the year is 1.32 million vehicles, which is 3% lower compared to its 2019 sales target, Automotive News reports.

Despite China showing signs of recovery (with auto sales on the rise for several consecutive months), Geely’s year-to-date sales slumped 19%, having sold just 530,446 vehicles. That’s a 19% drop compared to 1H 2019, leaving revenue down 23% at 36.82 billion yuan (RM22.25 billion), a figure that aligns with analyst estimates.

“Geely’s 1H20 earnings are largely in line with our expectation, thanks to its significant cost cut efforts, especially in wages and investments in fixed assets,” said Haitong International analyst Shi Ji. To reduce expenses, the automaker trimmed its workforce by 12% during the first half to 38,000 employees.

Geely said headwinds are set to persist, making 2020 “among the most difficult year in the group’s history.” It also warned that “the intense market competition in China could worsen further.”

Meanwhile, merger talks between Geely and Volvo is still currently on hold, pending Geely’s plans to go public in China. The planned merger will increase the financial and technological synergies between the two brands, and the combined entity would likely be listed in Hong Kong, Stockholm and China, thereby improving access to the global capital market.