I do not profess to be any kind of authority on China’s automotive industry. My recent trip to Beijing left my mouth agape at the sheer scale of… everything.
But I am a follower of the car business in a more general sense, especially the pervasive trends of consolidation, influence peddling, and shared capital expenditure. Not to mention the current trade war…
It’s clear that right now one of the most interesting, dynamic and potential-filled companies kicking around is Zhejiang Geely Holding Group Co., Ltd – or Geely for short.
Pictured: Geely Icon Concept. Top of page is the Polestar 1
While it doesn’t yet have a huge presence in Australia beyond a few of its full or partial subsidiary brands, and with some local engineering work, that will surely change.
What prompted this was a recent announcement from the company, purported to be China’s largest privately-owned automotive technology organisation (it’s China, let’s not pretend the government isn’t embedded), that it had climbed 76 places in the 2018 Fortune Global 500 list, to 267th, after revenues last year reached US$41.1 billion.
In the first half of this year, Geely Holding’s eponymous car brand sold 766,6230 cars at home, up 45%. Its subsidiary Volvo Cars sold 317,639, up 14.4%, and sales of its Euro-chic Lynk & Co brand (billed as a Chinese Mini, using Volvo’s scalable platform) were 46,252.
Pictured: Volvo XC60
But it’s not the sales that interest me. We can already see that Geely’s holding company owns Volvo Car and its Polestar electrified sports car spinoff brand, has its own luxury startup (Lynk & Co), and its mainstream Geely brand.
The latter pair share R&D, with the Swedes leading the way, back by Chinese cash. The total planned building area has grown to over 100,000 sq. metres that will become an open campus located in central Gothenburg.
But in very recent times the group also acquired the controlling stake in iconic British brand Lotus (and pledged to pump in $2.7b so far, in a ploy to turn that ship around), a 49.9% share of Proton with an eye to repairing Malaysia’s car industry, purchased a big share in AB Volvo trucks, and became the single largest shareholder in Daimler AG, parent company of Mercedes-Benz.
Pictured: Lynk & Co 02
On a more speculative note, the group recently completed the acquisition of Terrafugia, the US flying car company, and has established talks on hybrid tech with Toyota, the world’s biggest car company.
Beyond this, it also has a division (set up as a separate company under the umbrella group) called Geely Commercial Vehicle, parent of the London Electric Vehicle Company, which makes London’s iconic Black Cabs, and is about to launch a range-extender PHEV electric van.
What we’re seeing, then, is something akin to Volkswagen AG in scale, a group with a mainstream car/SUV brand (Geely), a proper luxury brand (Volvo and Polestar), a growing youth-focused brand (Lynk & Co), a sports-car maker (Lotus), a single-market-focused player (Proton), stakes in major players (Daimler AG, AB Volvo), and a commercial division (GCV) .
The parallels with the VW Group, respectively Volkswagen Passenger, Audi/Audi Sport, Skoda, Porsche, SEAT and Volkswagen Commercial/MAN are pretty obvious, aren’t they?
The thing to keep in mind is that what we have here is an entity that will be inside the top 10 auto conglomerates worldwide, and soon. Regardless of your thoughts on Chinese geopolitics, this hydra-headed company will be on your radar soon, if it isn’t already.
So, I’m calling it. Geely is China’s answer to behemoths like Volkswagen AG or the Renault-Nissan-Mitsubishi Alliance. Both it and Shanghai’s SAIC (parent to LDV and MG) will be part of the furniture. Whether the industry wants the redecoration is quite beside the point!
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