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Tag: Geely

  • Geely’s Polestar Plans China Showroom Expansion To Compete With Tesla

    Geely’s Polestar Plans China Showroom Expansion To Compete With Tesla

    Polestar, the premium electric vehicle maker owned by China’s Geely, plans a big expansion of its showroom network in the mainland, sources said, as it prepares for delivery of cars to compete with Tesla Inc’s locally made Model 3.

    Showroom strength is becoming an important differentiator for electric vehicle (EV) makers in the world’s biggest auto and EV market, as they line up new model launches.

    Polestar, which plans to deliver Polestar 2 electric sedans in China from July, currently has one showroom, in the capital of Beijing. It plans to have 20 showrooms, with most of the opening in the third quarter of this year.

    Polestar plans to deliver Polestar 2 electric sedans in China from July 2020

    Unlike sales of cars through dealers that most traditional automakers rely on, Polestar will sell directly to customers, a strategy also pursued by other EV makers including Tesla, Nio Inc, and Xpeng Motors, backed by Alibaba.

    Direct sales to customers can help automakers to better manage a car’s retail price and its production and inventory. However, it also adds to costs if automakers need to invest in self-owned showrooms like Tesla.

    Polestar, however, will partner with investors to build and operate the showrooms while still managing sales and delivery of cars, said the people, who spoke on condition of anonymity as the plan is not public.

    A rocket ship designed and built by Elon Musk’s SpaceX has lifted off with two Americans on a history-making flight to the International Space Station.

    A Polestar representative declined to comment.

    The automaker, based in Gothenburg, Sweden, started producing Polestar 2 sedans earlier this year in China and will also export them to Europe and the United States.

    It will open showrooms firstly in Shanghai and then expand to coastal Ningbo, northern Tianjin and southern Guangzhou. The showrooms will be mostly in shopping malls.

    In China, Tesla has over 50 showrooms. Nio currently operates around 110 showrooms, with some of the properties belonging to partners. Xpeng plans to have over 200 outlets by the end of the year from about 150 now, many of them belonging to partners.

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  • Daimler To Develop Smart Brand Together With Geely

    Daimler To Develop Smart Brand Together With Geely

    Daimler on Thursday said it will develop its next generation of Smart electric vehicles in China through a joint venture with rival Geely, deepening an alliance between the two carmakers.

    Daimler said it will build next generation Smart vehicles at a purpose built factory in China, and share its expertise in manufacturing, engineering and design with Geely.

  • Geely Holding Announces Management Change at Group Lotus

    Geely Holding Announces Management Change at Group Lotus

    Zhejiang Geely Holding Group (Geely Holding), China’s leading privately-owned automotive group, announced today that Mr. Feng Qingfeng, vice president and chief technical officer of Geely Auto Group, has been appointed to succeed Jean-Marc Gales as chief executive officer of Group Lotus effective immediately. Mr. Jean-Marc Gales has chosen to leave for personal reasons and will become Chief Strategic Advisor to Lotus Chairman, Daniel Donghui Li.

    Geely Holding, which acquired a controlling stake in Group Lotus in 2017, thanked Mr Gales for his contribution to the company over the past four years.

    Daniel Donghui Li, chief financial officer of Geely Holding and Lotus Cars Chairman, said: “Jean-Marc has stabilised and turned Lotus to profitability for the first time in the iconic brands history with new industry leading products and unique business models since joining the company in 2014. Lotus is poised for the next phase of growth under Feng Qingfeng’s leadership, where its expertise in lightweight materials and sport cars-engineering will form part of the wider expansion of Geely ‘s automotive portfolio. At the same time I will welcome Jean-Marc‘s Council as Chief Strategic Advisor to myself and the Board of Directors.”

    Geely acquired a majority holding in UK-based Lotus – a world leader in high-performance lightweight sports cars – as part of its agreement last year to acquire 49.9 percent of the shares of PROTON from HICOM Bhd (DRB) of Malaysia, Lotus’s former parent.

    Feng Qingfeng (Mr. Feng) said: “I am honoured to have been appointed to lead this iconic British sports car group. With Geely’s global synergies and total support I am confident that Lotus has an exciting opportunity to achieve its full potential as a luxury sports brand, based around its engineering legacy and its future product pipeline.”

    In 2017 Group Lotus sold 1600 sports vehicles, an increase of 10% versus 2016, produced at its plant in Norfolk, England. In 2017 the company showed a profit for the first time in history.

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  • Geely makes US$9b Daimler bet against tech ‘invaders’

    Geely makes US$9b Daimler bet against tech ‘invaders’

    Chinese carmaker Geely has built up an almost 10% stake in Daimler in a US$9 billion (RM35 billion) bet by its chairman that he can access the Mercedes-Benz owner’s technology in the growing battle for the future of automotives.

    The purchase by Li Shufu, Geely’s founder and main owner, means China’s largest privately owned automaker is now the biggest shareholder in Germany’s Daimler.

    Geely said on Saturday there were no plans “for the time being” to raise the stake further. Instead, it will seek to forge an alliance with Daimler, which is developing electric and self-driving vehicles, to respond to the challenge from new competitors such as Tesla, Google and Uber.
    “No current car industry player is likely to win this battle against the invaders from outside without friends. To achieve and assert technological leadership, one has to adapt a new way of thinking in terms of sharing and combining strength. My investment in Daimler reflects this vision,” Li said.

    “Daimler is pleased to announce that with Li Shufu it could win another long-term orientated shareholder, which is convinced by Daimler’s innovation strength, strategy and future potential,” the German company said in a statement.

    Geely officials plan to travel to Stuttgart to meet Daimler executives early this week and also hope to meet top German government officials in Berlin, two sources familiar with the matter told Reuters.

    The Chinese firm plans to use the meetings to underline that it intends to be a supportive long-term investor, they said.

    Daimler had no immediate comment on any meetings. Geely and the German economy ministry declined to comment.

    Chinese investors in German technology companies have tended to take a consensual approach, buying incremental stakes in companies such as robotics firms Kuka and Kion, typically after long consultation with management and other stakeholders.

    In November, Geely asked Daimler to issue new shares so it could buy a stake, as a way to access Mercedes-Benz technology for electric cars and trucks, including battery technology, to help Geely comply with a Chinese crackdown on pollution.

    But the German company turned down the offer saying it did not want to dilute existing shareholders, sources at the time told Reuters.

    Li changed tactics, and quietly amassed a stake of 9.69% worth US$9 billion at Daimler’s current share price.

    The sources said former Morgan Stanley Germany CEO Dirk Notheis was the architect of amassing the Daimler stake, working with former Morgan Stanley China executive Yi Bao.
    Notheis declined to comment, while Bao was not reachable.

    German state secretary at the economy ministry, Matthias Machnig, said separately that EU trade ministers meeting this week in Sofia would discuss how better to protect strategically important European companies from unwanted investors.

    “It is important that Europe keeps a close eye on which key European technologies foreign strategic investors are setting their sights on,” he said.

    Machnig did not comment specifically on Daimler.

    Only two or three auto manufacturers will likely survive, a source familiar with Li’s thinking told Reuters, prompting Geely to seek access to carmakers with a technological edge.

    Daimler is also the only one of Germany’s three carmakers not to be controlled by a family. Volkswagen is majority-owned by the Porsche-Piech clan, while BMW is 47% owned by Susanne Klatten, Germany’s richest woman, and her brother Stefan Quandt.

    Geely’s move poses a challenge to the German carmaker, since Mercedes-Benz already has an industrial alliance to develop cars and trucks with Renault-Nissan, which owns a 3.1% stake in Daimler, and has announced plans to build electric cars with existing Chinese joint-venture partner BAIC Motor Corporation.

    Bernstein Research analyst Max Warburton said: “It’s not clear what Geely wants and how it’s going to work, but we view this move as part of a broader Chinese move to gain involvement in the European automotive industry.”

    “China wants a payback after spending a decade gifting the European auto industry super-normal growth and profits. Now it wants more direct access to technology, brands and profits,” he wrote in a note shortly after the stake was disclosed.

    Zhejiang Geely Holding owns Volvo Cars, LEVC, the maker of London’s black cabs, and last year took a majority stake in sports car maker Lotus, a 49.9% stake in Malaysian automaker Proton, a US$3.3 billion stake in Volvo Trucks and control of flying car start-up Terrafugia.

    Geely sees potential in Daimler because it is developing high-speed connectivity for autonomous cars at a time when Li believes satellite-based internet connections could become more important, the source familiar with his thinking said.

    The source said Daimler and Geely had not held concrete talks about how to structure a potential joint venture, adding: “You know we have to become a stakeholder in order to engage.”

    Swedish truck maker AB Volvo, one of Geely’s other investments, has objected to the Chinese firm’s stake-building in Daimler, citing anti-trust concerns, the source added.
    “We will protect interests of both companies by abiding laws in the country and the company’s governance structure. We are not seeking to have a controlling power in Daimler,” the source added

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  • Alibaba to thank New Retail for Its record sales

    Alibaba to thank New Retail for Its record sales

    Continuing momentum in Alibaba Group’s New Retail business helped drive a 56 per cent year-on-year growth in sales for the quarter to December 31.

    The performance of the New Retail category – which combines its online (non-marketplace) and fast-growing offline retail businesses, including investments in Sun Art Retail and other established businesses – was a core highlight of the quarter, according to CEO Daniel Zhang.

    “Alibaba had another great quarter driven by the continued strength of the Chinese consumer and the wide and innovative range of services we provide for merchants and consumers,” he said.

    “We are excited by the continued momentum in New Retail, which came to life during another record-breaking 11.11 Global Shopping Festival. We expanded the scale and footprint of our New Retail initiatives with the vision of delivering true convergence of the online and offline consumer experience through mobile and enterprise technology.”

    Maggie Wu, CFO, said the group’s core business generated significant free cash flow of US$7.1 billion during the quarter, “enabling us to invest in New Retail, cloud computing, digital entertainment and globalisation”.

    Revenue from core online commerce (marketplace) activities rose 57 per cent to US$11.257 billion and from cloud computing by 104 per cent to $553 million. Digital media and entertainment sales rose 33 per cent to $832 million.

    The number of annual active consumers on Alibaba Group’s China retail marketplaces reached 515 million, an increase of 27 million from the year to September 30.

    Net income was $3.586 billion with operating margin was 31 per cent and adjusted EBITA margin for the core e-commerce business 53 per cent.

    Group highlights

    Alibaba summarised group highlights in its earnings statement, including:

    Taobao: Artificial Intelligence (AI) drove user engagement, with the Taobao app’s intelligent personal recommendations and innovative content formats continuing to drive strong growth in user engagement, conversion and annual active consumers. “We continue to invest in machine learning technologies which we apply to use cases that match consumer intent and product selection to deliver the best consumer experience.”

    Tmall: Tmall recorded 43 per cent year-on-year growth in physical goods GMV during the quarter, reflecting robust growth across all major categories including apparel and accessories, consumer electronics (mobile phones) and FMCG. “Tmall continues to be the platform of choice for the world’s top brands, with Givenchy, Giorgio Armani Beauty and Volvo establishing Tmall flagship stores and Longines, Hennessy, Dom Perignon and Baccarat joining our Luxury Pavilion in this quarter.”

    11.11: Last year’s annual November 11 Global Shopping Festival exceeded the previous year’s records, with GMV settled through Alipay on Alibaba’s marketplaces up 39 per cent year-on-year to $25.9 billion. “The continuous success of this record-breaking event is enabled by our resilient and scalable technology, as well as payments and logistics infrastructure that is capable of operating at massive scale.”

    New Retail: Rapid expansion through partnerships and innovative technologies included the opening of five new Hema fresh grocery stores in Shanghai, Beijing, Ningbo and Suzhou, taking the network to 25 at year end. “Hema exemplifies the convergence of online and offline retail by leveraging our in-store proprietary technology, digitised supply chain system, consumer insights and mobile ecosystem to provide a seamless experience for consumers.”

    In November, Alibaba formed a strategic alliance with Sun Art Group, the leading hypermarket and supermarket chain by revenue in China with over 440 stores nationwide. “Through this partnership, we aim to equip traditional retailers with our proprietary technology and know-how in online offline convergence to implement their digital transformation. In addition, the partnership with Sun Art will also enable us to accelerate the expansion of our New Retail offerings with national scale.

    International:  Alibaba’s cross-border and international retail businesses continue to show strong growth. Revenue from international commerce retail business reached $727 million in the, representing 93 per cent year-on-year growth, driven by its Southeast Asian platform Lazada and its global retail marketplace AliExpress. “While the markets for Southeast Asia and cross-border commerce remain very competitive, they are in the early innings of the game. We are optimistic about the long-term secular growth prospects of our international markets and will therefore continue to make significant investments for market share growth and focusing on the best customer experience.”

    Cainiao Network: Alibaba’s logistics division, Cainiao Network, processed 812 million orders during the 11.11 event. Cainiao Network operates an electronic shipping label system that standardises shipping data into structured formats, which enables efficient pick-and-pack operations for merchants and sorting and routing operations for delivery partners. “The advantages of this system have resulted in broad adoption by merchants and logistics service providers, both on and off our platforms, putting us in position to serve the growing consumption economy in China and roll out our New Retail strategy.”

    Cloud Computing:  Cloud computing revenue grew 104 per cent year-over-year to $553 million, driven by both robust growth in paying customers and revenue mix toward higher value-add product.  “In the December quarter, Alibaba Cloud launched 396 new products and features and continued to introduce proprietary AI technologies to tackle real-world challenges, such as traffic planning and optimising efficiency in manufacturing and airport operations. Alibaba Cloud continues to expand its customer base across a variety of industries.”

    Alibaba Cloud customers include Watsons China, carmaker Geely, and Beijing Capital International Airport.

    Digital Media and Entertainment: During the quarter, Youku video’s daily average subscribers more than doubled year-on-year, driven by several original drama series and shows that became popular hits with users.

    AI and innovation: Alibaba says its AI-powered voice assistant, Tmall Genie, surpassed 1 million unit sales since its official launch in July and the end of the year. “Tmall Genie is supported by a growing collection of sales and services and is an effective vehicle for offering a comprehensive set of every-day living applications within the Alibaba ecosystem,” the company said.

    In January, Alibaba’s Institute of Data Science Technologies (iDST), its AI research arm, developed a deep-learning neural network for natural language processing that scored higher than humans on a Stanford reading-comprehension test, the first time a machine has outperformed humans on such a test. “This development underscores Alibaba’s commitment to technology research which we believe builds the foundation for our growth in the long run.”

    Ant Financial: Alibaba Group agreed to take a 33 per cent equity stake in Ant Financial that will strengthen its strategic relationship pursuant to the series of agreements reached with Ant Financial in 2014. “We believe deepening our relationship through an equity stake in Ant Financial will bring key strategic benefits to us, including advancing our New Retail strategy with mobile payments, increasing user acquisition and retention through collaboration with the Alipay digital wallet (Alipay Wallet), and enhancing the execution of our international expansion.”

    The number of Alipay Wallet’s daily active users more than doubled during the quarter on a year-on-year basis.

  • China’s cars might finally going to make debut in Western markets

    China’s cars might finally going to make debut in Western markets

    After a decade of development, often through buying or benchmarking foreign technology and know-how, Chinese automakers are looking with greater ambition at selling their cars in major Western markets.

    Improvements in car design, technology and marketing at firms including Geely, GAC Motor and Great Wall Motor have brought them a bigger share in their home market, the world’s largest, and give them a better chance of survival in competitive markets in Europe and the United States.

    Once distant dreams of staking a claim in Western strongholds may now be edging nearer.

    “We have in the Western world an outrageous arrogance. We think we’re ahead. It’s going to change,” says Alain Visser, Senior Vice President of Lynk & Co, a new brand set up by Geely.

    “China is passing you at a speed that in our arrogance we don’t even see,” Visser told Reuters earlier this month.

    Hangzhou-based Geely, which owns Volvo Cars and Lotus and makes London black cabs, has its sights set on selling cars in Europe in 2019 and the United States a year later. The Lynk & Co brand, set up in Sweden with Volvo, will spearhead its attack.

    Geely plans only to sell ‘green’ cars – conventional hybrid, plug-in hybrid and all-electric models – in those markets, and would primarily sell through directly-owned stores and online rather than through traditional dealer franchises. It could also offer cars for rent via a subscription model similar to Netflix and Spotify.

    GAC Motor, whose parent Guangzhou Automobile Group partners Honda Motor, Toyota Motor and Fiat Chrysler in China, may beat Geely to the U.S. market, eyeing entry by end-2019. But unlike Lynk & Co, GAC is more likely to sell through a traditional distribution network of franchised retail stores there.

    It’s taken Chinese automakers years to get this far, and, to be sure, there will be significant road bumps.

    “A key obstacle in markets like the United States is a consumer bias against Chinese-made goods,” said Jeff Cai, a Beijing-based senior director at JD Power & Associates. “Our research found most U.S. consumers think China is a third-world country that builds low-quality products.”

    There’s also the thorny issue of China’s trade surplus with the United States – an imbalance high on U.S. President Donald Trump’s radar. Cars shipped in from China would likely increase that surplus.

    Selling direct, online

    Geely’s Lynk & Co aims to open its own flagship store in Berlin in the second half of 2019, and a similar outlet in San Francisco in 2020.

    In some U.S. states, which don’t allow direct selling, Lynk & Co plans a subscription-based sales model, renting cars to consumers on contracts as short as a month. Those deals will include insurance, warranty and other benefits.

    Visser says Lynk wants to test this unconventional retail model because it reckons around a quarter of revenue is lost through the traditional distribution business in dealer margins and discounting. He expects to recoup more than half those ‘losses’ by selling direct.

    Some of those savings will be passed on to customers by selling Lynk & Co cars at a more affordable price, Visser said, adding Lynk & Co aims to sell 250,000 vehicles a year across Europe and the United States – though he gave no firm timescale for that.

    In the United States, selling direct could put Lynk & Co on a collision course with the politically powerful National Automobile Dealers Association (NADA), the lobby group for franchise dealer operators.

    While Visser says NADA has “unbelievable power”, he believes dealers will eventually come around to Lynk & Co’s retail model as it would likely be franchise dealers who get to service Lynk & Co cars, carrying out repairs and regular maintenance – and that’s where dealers make most money.

    No Trumpchi for U.S.

    For its part, GAC Motor is looking at the possibility of building out its overseas presence from the U.S. northeast, two people close to the company said.

    That region, including Massachusetts, Connecticut, Maine and New York, is seen as being more open to foreign cars and to the sport-utility vehicles (SUV) that GAC Motor plans to sell, they said.

    The company said it has not yet decided a U.S. entry point, but would more likely opt to build a sales network with franchise dealers or join an existing dealer group.

    GAC Motor – which says it has developed rather than acquired its technologies – said it was conducting market research to determine the brand’s positioning and identify products for its U.S. business.

    Its first U.S. offering is likely to be an SUV sold in China as the Trumpchi GS8. Given the political sensitivities, the model will be renamed for the U.S. market.

    “We respect culture in the U.S. and understand there’s no precedence to use the current president’s name as a brand name,” the company said through a spokeswoman.

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  • China’s Geely beats expectations as Volvo pays off

    China’s Geely beats expectations as Volvo pays off

    China’s Geely Automobile Holdings Ltd said on Wednesday that first-half profit more than doubled, scoring its fastest earnings growth in eight years as cars designed with its Swedish unit Volvo won over domestic consumers.

    Although known at one point more for its copycat designs and lower quality vehicles, the Hangzhou-based firm has transformed itself into an automaker with up-market aspirations.

    Vehicles engineered with Volvo know-how, such as the GC9 sedan and the Boyue sport-utility vehicle, have been hot-sellers in China, the world’s biggest auto market.

    “So far in 2017, the group’s performance has exceeded management’s original expectations despite a generally weaker market in China during the same period,” the company said in a statement to the Hong Kong bourse.

    Net profit came in at 4.34 billion yuan ($648.96 million), 128 percent higher than the 1.91 billion yuan it made in the same period a year earlier and eclipsing an estimate of 3.61 billion yuan from CCB International.

    It said it had decided not to pay an interim dividend.

    Sales jumped 89 percent in January-July and last month Geely raised its 2017 sales target by 10 percent to 1.1 million vehicles. It sold 766,000 vehicles last year.

    Geely’s parent Zhejiang Geely Holding Group owns the maker of London’s black cabs and this year acquired a 49.9 percent stake in Malaysian automaker Proton.

    The carmaker said that the business environment in its previous key export markets in Eastern Europe and the Middle East remained weak and that it would continue to operate its exports business at the current restricted scale for the rest of 2017.

    In its next phase of expansion, Geely plans to market a third brand, Lynk & Co – in developed markets next year, beginning with Europe and the United States.

    Geely also plans to use more Volvo-developed technologies including small turbo-charged gasoline engines in Geely-brand cars.

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  • Volvo Cars to share engine technology and more with parent Geely

    Volvo Cars to share engine technology and more with parent Geely

    Sweden’s Volvo Cars, a unit of Zhejiang Geely Holding Group, has agreed to make some engines available for Geely-branded vehicles, sources said, deepening ties between the carmakers who already share technology through third brand Lynk & Co.

    Three people close to Geely and Volvo said the first Volvo-powered Geely model was expected to hit the market as early as late next year as a 2019 model year car.

    The car will be equipped with a new 1.5-liter turbo charged gasoline engine which Volvo has been developing for smaller cars, the knowledgeable individuals said.

    Volvo is expected to share a 2.0-liter turbo-charged engine at a later date and will also allow Geely-branded cars to use a common vehicle platform the two automakers developed jointly for Volvo and Lynk & Co.

    “The terms of the recently announced joint venture between Volvo Cars and Geely Group mean that existing and future technologies can be shared by Volvo, Geely Auto and Lynk & Co, under license agreements,” a Volvo spokesman said.

    Analysts questioned Geely’s ability to absorb the best of Volvo when it acquired the automaker from Ford Motor Co almost seven years ago. Yet Geely has been working progressively to improve its technology with Volvo know-how.

    Better designed cars following its 2010 purchase of Volvo – such as its GC9 sedan and Boyue sport-utility vehicle – have helped lift Geely’s fortunes. Its China sales grew 50 percent last year to 766,000 vehicles and it expects sales to climb well above the 1 million mark this year.

    Ultimately, it aspires to sell more outside China.

    Earlier this year, Geely bought 49.9 percent of struggling Malaysian carmaker Proton from conglomerate DRB-HICOM Bhd. Geely officials have told Reuters the Hangzhou automaker is planning to improve Proton cars by sharing Geely and Volvo technologies.

    Analysts have said one big risk for Volvo, as it combines more with its parent, is the dilution of Volvo’s brand image by sharing its technology and know-how with a Chinese auto upstart.

    Volvo Chief Executive Hakan Samuelsson said the key was to differentiate the brand sufficiently – even if the two groups share more technology. For Volvo, that is about more and better safety equipment, among other aspects.

    “The progress Geely has been able to make in improving products and brand image over the past several years makes me feel more confident they can execute this process successfully,” Yale Zhang, head of Shanghai-based consultancy Automotive Foresight, said.

    Last month Geely and Volvo said they plan to go beyond Lynk & Co and create a joint venture to share technology, such as vehicle architecture and engines via cross licensing arrangements managed by that joint venture.

    Samuelsson told Reuters last month the deal would provide Volvo with greater development resources and efficiency in purchasing parts. It also should help Volvo speed up introduction of new technology in areas such as components for electric vehicles, he said.

  • China’s Geely doubles earnings as Volvo tech boosts sales

    China’s Geely doubles earnings as Volvo tech boosts sales

    China’s Geely Automobile Holdings posted its biggest profit growth in eight years on Wednesday, as improved product design and engineering following its 2010 purchase of Sweden’s Volvo helped propel it to record sales.

    Geely, which also owns the maker of London’s black cabs, has already forecast a 31 percent jump in sales for the current year as affordable models introduced after the Volvo acquisition, such as its GC9 sedan and Boyue sport-utility vehicle, exceed initial estimates.

    Long seen as a no-frills brand, Geely has transformed itself into an automaker with up-market aspirations, using its Volvo research-and-development advantage to climb the sales table in the world’s largest auto market where it ranks around seventh.

    Come next year, Geely plans its next phase of expansion as it aims to become China’s first automaker to market its own brand – new Volvo collaboration Lynk & Co – in developed markets, beginning with Europe and the United States.

    Entering major markets with an unknown Chinese brand is an expensive risk, analysts say, but investors are unperturbed: Geely’s share price has trebled over the past 12 months.

    “It’s a total turnaround story,” said a fund manager at a Taiwan-based investment firm that bought a significant amount of Geely stock last year.

    “Before it was just a normal domestic brand, but after several new product launches it successfully elevated its brand image,” said the person who was not authorized to speak publicly on the firm’s investments and so declined to be identified.

    Geely’s China sales grew 50 percent last year to 766,000 vehicles, powered by the GC9 and Boyue, as well as small cars featuring Volvo technology. It aims to top 1 million this year, though could sell far more depending on market conditions, a Geely official with direct knowledge of the matter told Reuters.

    For 2016, net profit more than doubled to 5.1 billion yuan ($741 million), its strongest growth since 2008. The figure is set to rise 37 percent to 7 billion yuan in 2017, showed a Reuters poll of analyst estimates prior to Geely’s Wednesday filing.

    Geely shares were down 1.2 percent in early afternoon trading after the earnings release.

    OVERSEAS GAMBLE

    To be sure, growth has come at a cost. Geely and parent Zhejiang Geely Holding Group have spent 10 billion yuan on R&D in each of the past three to four years, or about 15 percent of current revenue, said spokesman Victor Yang.

    That compared with 2 billion yuan in 2015 at domestic rival BYD.

    But Geely’s domestic growth spurts could lessen as expansion in China’s overall passenger car market slows following the reduction of subsidies for small-engine vehicles, adding impetus to any international push.

    “The current focus of our work is firstly the pace of development in China and increasing our share of the Chinese auto market, then next we can focus our work abroad,” Geely Chairman Li Shufu told reporters in Beijing earlier this month.

    But entering markets where the brand is unknown is a gamble, and it could take years to gain traction, said James Chao, Asia-Pacific chief of consultancy IHS Markit Automotive.

    As there is plenty of room for growth in China, however, there is no need to be concerned about the move abroad, said fund managers at two investment firms that hold Geely stock.

    “If they do well abroad it’s a bonus, and if they don’t then it’s not a big reason to worry,” one of the managers said.

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  • China’s Geely shows global ambitions, launching new compact SUV

    China’s Geely shows global ambitions, launching new compact SUV

    Chinese automaker Geely, the owner of Volvo cars, showed off the first model of its new Lynk & Co brand in Germany on Thursday, a compact SUV aimed at taking on the likes of BMW and Mercedes-Benz, as well as ride-hailing service Uber, across the world.

    The Lynk, made in China, will go on sale at home in 2017, followed by Europe and the United States in 2018, and marks one of the first attempts by a Chinese carmaker to create a global brand that makes use of European design and technology know-how.

    Chinese companies have been snapping up cutting-edge German technology to push upmarket and gain a global footprint. This year alone, Chinese home appliances maker Midea has agreed to buy German robotics firm Kuka and Fujian Grand Chip Investment Fund LP is taking over semiconductor equipment maker Aixtron.

    Long seen as a cheap, no-frills brand in China and unheard of in Europe, Zhejiang Geely Holding Group purchased struggling Swedish carmaker Volvo from Ford in 2010 to help it leapfrog a decade of research and development.

    While Volvo will continue to focus on premium vehicles, Lynk is an attempt to grab a slice of the mid market. It will initially take on foreign carmakers’ joint ventures in China, but – as shown by the global launch in Berlin – it also aims to challenge the world’s biggest automakers in their own markets.

    ‘SMARTPHONE ON WHEELS’

    At the launch of the ’01’ model at a former railway station in Berlin that now frequently hosts start-up conventions, Alain Visser, senior vice president at Lynk & Co, described the SUV as “our first smartphone on wheels.”

    It is targeting tech-savvy consumers that may have prioritized flexibility over car ownership in the past. “We are looking very much at millennial consumers all over the world who are very much concentrated around bigger cities,” he said.

    Each car will be permanently connected to the Internet and have a “share” button, enabling owners to rent out their car to other motorists via a smartphone app.

    “That becomes a source of income, which some of the consumers may use, a bit like an Airbnb vehicle,” said Visser, referring to the home rental company.

    Lynk has more models in its line-up, which the carmaker plans to launch over the next 3-5 years, but Visser declined to give details on body styles or launch dates apart from the name of the next car: ’02’.

    Once the full line-up is launched, Lynk aims to sell more than 500,000 vehicles a year by 2021, he said.

    EUROPEAN KNOW-HOW

    Geely’s design has been refined by British designer Peter Horbury, who headed up design at Volvo in the 1990s and oversaw it for Jaguar, Aston Martin and Ford’s other brands from 2002.

    In doing so, Geely is upping the competitive pressure on established global carmakers, which have long accused Chinese rivals of merely ripping off their designs.

    Jaguar Land Rover (JLR), for example, has sued China’s Jiangling Motor after it released the Landwind X7 SUV in 2014, a car that JLR says copies its Land Rover Evoque while costing around the third of a price.

    The car will be a hybrid powered by a 1.5-litre three cylinder petrol engine combined with a lithium-ion battery and electric motor, and will be the first based on the Complex Modular Architecture platform developed by Geely and Volvo.

    Mercedes-owner Daimler and BMW are also investing heavily in hybrid vehicles and will be watching closely to see how the ’01’ fares with European consumers.

    Geely said the car would be priced competitively and said it would be fixed across all markets, but declined to give details. It plans to keep down costs by selling the car online only and limiting the number of configurations available.

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