Caixin Weekly | Geely in a Rush to Catch Up After Falling Behind (AI Translation)
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文｜财新周刊 安丽敏
By Caixin Weekly's An Limin
文｜财新周刊 安丽敏
By An Limin, Caixin Weekly
2024年1月，吉利汽车（00175.HK）单月销售21.3万辆，以1.2万辆优势超越比亚迪（002594.SZ）。一个月的领先并不能左右全年，但对被比亚迪压制两年的吉利汽车来说，结果仍然值得庆贺。
In January 2024, Geely Automobile (00175.HK) sold 213,000 vehicles in a single month, surpassing BYD (002594.SZ) by 12,000 units. Although one month's lead cannot determine the outcome of the entire year, for Geely Automobile, which has been overshadowed by BYD for two years, this result is still worth celebrating.
吉利汽车成立于1997年，是中国民营车企的代表。创始人李书福曾经为了获得造车资质四处奔走，急切的时候，他甚至向主管领导呼吁“给我一次失败的机会”。创业初期，吉利汽车与其他中国车企一样，靠低质低价进入市场，抓住一切机会艰难向上突破。
Founded in 1997, Geely Automobile is a representative of China's private car companies. The founder, Li Shufu, once traveled extensively to obtain the qualifications for manufacturing cars. In his urgency, he even appealed to the supervising leaders to "give me one chance to fail." In its early days, like other Chinese car companies, Geely Automobile entered the market with low quality and low prices, seizing every opportunity to make difficult breakthroughs upwards.
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- In January 2024, Geely Automobile sold 213,000 vehicles, surpassing BYD by 12,000 units, marking a significant achievement for Geely which had been trailing behind BYD for two years. Geely's journey from its founding in 1997 involved aggressive growth strategies including the acquisition of Volvo Cars in 2010, which significantly enhanced its technological and brand development.
- BYD excelled in the transition to new energy vehicles (NEVs), ceasing fuel vehicle production in April 2022 and achieving explosive sales growth from 2021 to 2023. In contrast, Geely's shift towards electrification and NEVs lagged, with its "Blue Geely Initiative" falling short of its ambitious targets for electric vehicle sales.
- Geely Holding Group is diversifying and expanding aggressively into various sectors beyond traditional automotive manufacturing, including investments in low-Earth orbit satellites, mobile phones, and flying cars. Despite challenges in electrification compared to BYD, Geely aims to become a major player in the new energy vehicle era but faces obstacles in internal coordination among its numerous brands and adapting to market changes.
In January 2024, Geely Automobile achieved a significant milestone by selling 213,000 vehicles in a single month, surpassing its competitor BYD by 12,000 units. This achievement is notable for Geely, a company that has been trailing behind BYD for two years [para. 1]. Geely Automobile's journey began in 1997, founded by Li Shufu, who was determined to break into the car manufacturing industry despite initial challenges. The company entered the market with low-quality and low-priced vehicles but gradually made its way upwards [para. 2]. A major turning point for Geely came in August 2010 when it acquired Volvo Cars from Zhejiang Geely Holding Group Co., Ltd., which significantly enhanced its technological capabilities and brand image [para. 3].
BYD's performance in recent years has been remarkable, with sales skyrocketing from 427,000 units in 2020 to over 3 million units by 2023. This surge was largely due to BYD's successful pivot towards new energy vehicles (NEVs) and its decision to cease production of fuel vehicles in April 2022 [para. 4]. Despite launching the "Blue Geely Initiative" aimed at boosting NEV sales, Geely struggled to keep up with the industry transition towards electrification. By the end of 2020, NEVs only constituted a small fraction of Geely's total sales [para. 5].
Geely also misjudged the market potential for hybrid vehicles. Initially believing that hybrids would find their niche as subsidies for NEVs were phased out, the company was caught off guard when regulatory authorities extended these subsidies due to the COVID-19 pandemic. This led to a strategic shift towards focusing more on pure electric and plug-in hybrid vehicles [para. 6]. Despite these efforts and adjustments in strategy, including stepping down from CEO positions within his companies for a more modern corporate management system, Li Shufu has seen mixed results. His ventures outside of automotive have been more successful recently, with several companies under his investment going public or planning to do so [para. 7][para. 8].
Geely Holding Group announced its ambition to become the "Volkswagen of the new energy vehicle era," aiming for broad brand diversification similar to Volkswagen Group. However, both companies face challenges in transitioning from internal combustion engines to electrification [para. 9][para. 10]. Despite setbacks and strategic missteps in electrification and technology direction compared to BYD's aggressive advancements in NEVs and plug-in hybrids [para. 11][para. 12], Geely is not standing still.
The establishment of ZEEKR as a pure electric vehicle company signifies Geely's commitment to competing in the smart electric vehicle market alongside other traditional automakers launching their own EV brands [para. 13]. With various brands under its umbrella targeting different segments of the market and technologies such as hybrid power through "Leishen Power," Geely aims for comprehensive transformation towards new energy across its brands like Lynk & Co., which announced full electrification plans [para. 14][para. 15].
Despite these efforts and strategic expansions including acquisitions like Lotus going public through SPAC mergers and investments across different sectors beyond automotive [para. 16], challenges remain. Competition with BYD intensifies as it continues expanding its product lines and lowering prices aggressively. Meanwhile, internal coordination among Geely Holding Group’s diverse brands poses additional hurdles compared to BYD’s more unified approach [para. 17][para. 18].
Recent personnel changes within Volvo Cars China suggest possible tensions between Volvo Cars' Swedish headquarters and Geely Holding Group but also indicate ongoing adjustments within the group’s structure aimed at better alignment and synergy among its various entities [para. 19]. As China’s automobile market shifts focus from first-time buyers to consumers seeking upgrades or additional purchases, capturing this segment becomes crucial for automakers like Geely aiming to regain leadership positions against competitors like BYD[para. 20].
Industry observers note that while Li Shufu may appear less focused on automotive ventures lately[para. 21], his investments in areas such as smartphones through acquiring Meizu and establishing ECARX highlight an understanding that future competition will likely center around intelligence rather than just electrification[para. 22]. As we move forward into 2024, it remains uncertain whether these strategies will enable Geely Automobiles narrow or widen their gap with leading competitors such as BYD[para. 23].
- Geely Automobile
吉利汽车 - Summay： Geely Automobile, a prominent private car company in China, was established in 1997 by Li Shufu. The company initially gained recognition by offering low-cost vehicles, which allowed it to capture a significant market share. A pivotal moment for Geely came in 2010 when it acquired Volvo Cars, which significantly enhanced its product development and brand image. By 2017, Geely had emerged as the top-selling domestic car brand in China, maintaining its leading position until 2022.However, Geely faced a setback when BYD overtook it in 2022, largely due to BYD's focus on new energy vehicles. Geely's transition to electrification was slower, and its "Blue Geely Initiative" to increase new energy vehicle sales to 90% by 2020 fell short, reaching only 5.2% by the end of that year.In response, Geely has been making efforts to catch up in electrification, launching new electric and hybrid models under brands like Zeekr, Lynk & Co, and Geely Galaxy. Despite these efforts, as of 2024, Geely still lags behind BYD in terms of electrification and overall sales. Li Shufu, the company's founder, has shifted his focus to broader investments beyond the automotive sector, while still aiming to regain the top spot in the domestic car market.
- BYD
比亚迪 - Summay： Based on the article, here are some key points about BYD:- BYD is a Chinese automaker that has experienced rapid growth in recent years, surpassing Geely Automobile in sales in 2022 and 2023.- BYD's sales surged from 427,000 units in 2020 to 3.024 million units in 2023, making it the top-selling domestic brand in China.- BYD's success is attributed to its strong performance in the new energy vehicle market, particularly in plug-in hybrid electric vehicles (PHEVs).- In April 2022, BYD announced the cessation of gasoline vehicle production, focusing solely on electric vehicles.- BYD's multi-brand strategy includes the parent BYD brand and sub-brands like "Fangcheng Bao" and "Yangwang", covering a wide range of price points from 50,000 to 300,000 yuan.- BYD's aggressive pricing strategies, such as the launch of "Glory Edition" models with price reductions, have put competitive pressure on other automakers like Geely.- Overall, BYD's strong performance in the new energy vehicle segment has allowed it to surpass Geely and become the leading domestic brand in China's auto market.
- Volvo Cars
沃尔沃汽车 - Summay： According to the article, Volvo Cars was acquired by Zhejiang Geely Holding Group Co., Ltd. in 2010, marking a significant turning point for Geely Automobile. The acquisition provided Geely with valuable technology and know-how, enabling the company to enhance its product development and brand system. Additionally, Volvo Cars established a comprehensive benchmark model for Geely, including organizational structure and product development processes. The collaboration between Volvo Cars and Geely Automobile also led to the development of the Compact Modular Architecture (CMA) for midsize vehicles, which was utilized by Geely to launch the new Lynk & Co brand.
- Lynk & Co.
领克 - Summay： Lynk & Co is a car brand established by Geely Automobile Holdings Limited, a subsidiary of Geely Holding Group. It was introduced in 2016 as a joint venture between Geely and Volvo Cars, utilizing the Compact Modular Architecture (CMA) platform developed by both companies. Lynk & Co's first model, the 01, was launched in 2017, and it has since expanded its product line to include the 02, 03, 04, 05, 06, and 07 models.In 2023, Lynk & Co launched the 08 super extended-range hybrid model, marking its transition to electrification. The brand has ceased the development of purely fuel-powered models and plans to launch several new hybrid and pure electric models in 2024. Geely Holding Group has positioned Lynk & Co to focus on the 200,000-300,000 yuan price segment, with the aim of competing with BYD's models.
- ZEEKR
极氪 - Summay： Based on the article, here are some key points about ZEEKR:- ZEEKR is an all-electric vehicle company established by Geely Holding Group in 2021, with its main operating entity in China being Zhejiang ZEEKR Intelligent Technology Co., Ltd.- The company focuses on high-end electric vehicle models and has achieved impressive sales performance, with an average product selling price exceeding 300,000 yuan.- As of January 2024, ZEEKR had cumulatively sold 209,000 vehicles, with a sales target of 230,000 units for 2024.- In November 2023, ZEEKR submitted its prospectus to the U.S. Securities and Exchange Commission, planning to issue American Depositary Receipts (ADRs) and list on the New York Stock Exchange (NYSE).- ZEEKR is part of Geely Holding Group's dual-track strategy, with the other track focusing on hybrid electric vehicles under the "Leishen Power" brand.- Geely Holding Group aims to position ZEEKR in the high-end all-electric vehicle market, while its other brands target different market segments, such as Lynk & Co focusing on 200,000-300,000 yuan price range and the Geely parent brand focusing on below 200,000 yuan.In summary, ZEEKR is Geely Holding Group's dedicated high-end electric vehicle brand, with strong sales performance and plans for an IPO in the United States. It plays a key role in Geely's dual-track electrification strategy.
- 1997：
- Geely Automobile is founded.
- 2001：
- Geely Automobile obtains its manufacturing qualifications.
- 2007：
- Geely Automobile releases the "Ningbo Declaration," seeking a strategic transformation towards higher technology and brand elevation.
- 2008：
- The global financial crisis erupts, causing many multinational automotive companies to face operational difficulties.
- 2010：
- Geely Automobile acquires Volvo Cars for $1.8 billion.
- 2011：
- Geely Automobile recruits Peter Horbury, the Vice President of Design at Volvo, to reshape its product design style.
- 2013：
- Geely's European Research and Development Center in Gothenburg, Sweden, commences operations.
- 2014：
- A significant number of new electric vehicle (EV) manufacturers enter the market.
- 2015：
- Geely Automobile launches its "Blue Geely Initiative," claiming that by 2020, the sales volume of new energy vehicles would account for 90%, including a 35% share for pure electric vehicles.
- 2016：
- Volvo Cars and Geely jointly launch the Compact Modular Architecture (CMA) for mid-size vehicles.
- 2017：
- Geely Automobile becomes the top-selling domestic car brand in China.
- 2018：
- Geely Holding Group purchases a 9.69% stake in Daimler AG, the parent company of Mercedes-Benz, thus becoming its largest single shareholder.
- 2020：
- Electric vehicle pioneer Tesla (NASDAQ: TSLA) achieves its first full year of profitability since its establishment in 2003.
- September 2020：
- China announces its goals to peak carbon emissions by 2030 and achieve carbon neutrality by 2060, giving a boost to the development of new energy vehicles.
- 2021：
- Geely Holding Group introduces a new version of the "Blue Geely Initiative," and Li Shufu hands over key positions such as CEO and legal representative of Geely Holding Group to Li Donghui.
- March 2021：
- Gan Jiayue becomes the CEO of Geely Automobile Group Limited at the age of 40.
- March 2021：
- ZEEKR Intelligent Technology Holding Limited (hereinafter referred to as "ZEEKR") is established in the Cayman Islands.
- June 2021：
- Zhejiang Geely Powertrain Co., Ltd is renamed to Ji Guang Wan Technology Co., Ltd.
- October 2021：
- Ji Guang Wan Technology Co., Ltd launches its hybrid power technology brand "Leishen Power."
- September 2023：
- Lynk & Co launches its 08 super extended-range hybrid model.
- February 2023：
- Geely launches a new energy brand, "Geely Galaxy".
- February 19, 2024：
- BYD announces the launch of the "Qin" plug-in hybrid and pure electric Glory Edition models.
- February 20, 2024：
- Geely announces a 20,000 yuan price cut for the plug-in hybrid version of its Emgrand model, and the terminal selling price of Galaxy's new model is also reduced by nearly 10,000 yuan.
- August 2023：
- Volvo Cars China experiences a significant shake-up in its personnel.
- November 2023：
- Geely Holding Group announces plans to sell 100 million shares of Volvo Cars.
- January 2024：
- Volvo Group reports that Geely Holding Group planned to reduce its shareholding in the company from 8.2% to 6.8%.
- January 2024：
- Geely Automobile sold 213,000 vehicles in a single month, surpassing BYD by 12,000 units.
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