Geely: Brand expansion, production capacity increase, CASE strategy implementation

Proton’s expansion in Asia, electrified new brands, and Smart EV global launch in 2022

2019/12/04

Summary

吉利汽車 販売台数

 In 2018, major Chinese automaker Geely Automobile Holdings Ltd. (hereafter: Geely Automobile Holdings) significantly increased its global vehicle sales to 1.5 million units, reflecting an increase of 20.3% over the previous year. In addition, in the midst of the market slowdown in China, domestic sales grew 19.2% to 1.473 million units. Geely Automobile Holdings achieved record high sales both globally and domestically. At the beginning of 2019, the company set a sales target of 1.51 million units for the year, but this figure was revised downward to 1.36 million units in July.

 After the acquisition of Volvo Cars in 2010, Zhejiang Geely Holding Group acquired London Taxi (now called London Electric Vehicle Company; LEVC) in 2013 and Proton of Malaysia in 2018. Zhejiang Geely Holding Group consists of five sub-groups (Geely Auto Group, Volvo Car Group, Geely Commercial Vehicle Group, Geely Technology Group, and Mitime Group). Among these, three are engaged in the manufacturing and sale of finished vehicles: Geely Auto Group, Volvo Car Group, and Geely Commercial Vehicle Group. As of September 2019, Geely is comprised of three sub-groups with nine brands, attracting a broad customer base by offering a wide array of specialty specialized brands, from low-end to high-end, such as connected cars and NEV (new energy vehicles) brands, and commercial vehicle brands.

 After Zhejiang Geely Holding Group (hereafter: Geely Holding Group) Chairman Mr. Li Shufu became the largest shareholder of Daimler AG in February 2018, collaborations with Daimler have been progressing. In March 2019, the company announced that it had established a joint venture for the development of the “smart” brand in China, the global market launch planned for 2022. Further, in May 2019, a mobility joint venture was established with Daimler subsidiary Daimler Mobility Services GmbH. The joint venture, Weixing Technology Co., Ltd., will specialize in the operation ride hailing services using high-end (premium) models.

 With the rapid increase in sales in recent years and with a target of reaching sales of 2 million units in 2020, Zhejiang Geely Holding Group has been expanding existing plants and building new plants one after another, and furthering the manufacturing of models which go beyond the boundaries of Geely Auto Group, Volvo Car Group, and Geely Commercial Vehicles. On October 7, 2019, the company announced a plan to merge the internal combustion engine operations of Geely Holding Group and Volvo Car Group and make an independent business unit to develop and supply next-generation combustion engines and hybrid systems as a global supplier. Volvo Cars will focus on the development of an all-electric range of premium cars.

 The strategy for CASE (connected, autonomous, sharing, electric) is to build a battery supply system in which Geely Group both collaborates with other companies and works in-house to promote electrification. In the connected area, the company is partnering with major IT companies such as Baidu and Tencent. Geely is planning its production models to be 5G compatible. As for sharing, besides the venture with Daimler, since 2015 a Geely subsidiary has been launching NEV models. In addition, the company is aiming to announce its plan to release a Level 4 autonomous driving vehicle in 2022.

 This report will focus primarily on the Geely Auto Group, with some discussion on Volvo Cars.


Related Reports:

FY 2018 NEV Credit/Corporate Average Fuel Consumption Credit of OEMs(Aug. 2019)
China NEV Alliances(Aug. 2019)
Auto Shanghai 2019:Geely, Great Wall, BYD, Chery, Zotye, JAC(Jun. 2019)
2018 China market: 28.081M units for new car sales, 23.71M units for passenger cars(Feb. 2019)
Geely:Launching new LYNK & CO brand in 2017, sales target of 2 million units in 2020(May 2017)



Geely Group Overview: Expanding brands to reach 2 million vehicles by 2020

 Since entering the automotive business in 1997, Geely has increased sales every year except for a one-time decrease in sales in 2014, growing rapidly from 412,000 units in 2011 to over 1.5 million units in 2018. It differs from most other Chinese OEMs in that it is a private company and it has developed a complete vehicle manufacturing business without forming a joint venture with any foreign OEMs. Furthermore, by proactively investing in long-established foreign OEMs struggling with poor management, the company has been able to improve brand power. After investing in Volvo Cars, it brought in London Taxi (now called LEVC), Proton, Lotus and Polestar; conversely, Geely initiatives in less-established brands include the announcement of the new brands Lynk & Co, which is developing connected cars for the youth market, and Geometry, a high-end EV brand. Geely Holding Group is continuing to introduce new models focusing on NEVs for its “Geely 20200 Strategy” targeting 2 million units of production and sales by 2020 of its various brands as it accelerates its growth.

Note: The “Geely 20200 Strategy” is a strategy to develop a wide range of new models, expand production capacity, and enhance its dealer network to meet a production and sales target of 2 million units in 2020.

 

Geely Group automobile brand organization

Group Brand Overview
Geely Auto Group Geely Auto A wide range of models from entry to middle class models. Geely Auto was formed in 2014 by the unification of 3 brands (Emgrand, Gleagle, and Englon).
Lynk & Co Geely Auto Group’s first global brand introduced into the China market in November 2017. The main target market segment is the younger generation; and it is expanding connected cars.
Geometry Geely Auto Group’s first high-end EV brand, introduced in Singapore in April 2019. There are plans to introduce 10 models by 2025.
Proton Proton was Malaysia’s national car manufacturer. In October 2017, Geely Holding Group acquired Proton’s shares, and made it a group affiliate.
Lotus British sports car brand. In June 2017, Geely Holding Group agreed to acquire 51% of the shares, making it a group affiliate.
Volvo Car Group Volvo Cars In 2010, it was rebuilt as a Geely Group subsidiary after acquisition from Ford. Headquarters are in Sweden.
Polestar High performance electric car brand. In 2015, Volvo Cars acquired Polestar Performance.
Geely New Energy Commercial Group London EV Company In 2013, it became an affiliate of Geely Holding Company and in July 2017, the company name was changed from London Taxi to London Electric Vehicle Company (LEVC). It is expanding London taxis.
Yuan Cheng Auto This unit will develop the NEV commercial vehicle brand and its main products are light-duty trucks and buses. It was formerly Dongfeng Nanchong Motor.

(Source: Geely Holding Group’s official website; the green highlights identify brands added or changed after March, 2017.)

Geometry A Lynk & Co 03 PHEV
Geometry A Lynk & Co 03 PHEV

 

Geely Automobile Holdings business results: 2018 sales of CNY 106.6 billion, approximately double 2016 sales

  The new models introduced from 2016 to 2018 were the “Boyue”, “Binyue”, and “Lynk & Co” SUVs and the compact sedan “Borui”, centering on SUVs of which market introductions were later than competitors. 2018 sales were about 14.9% higher than the previous year, reaching a historic high of CNY 106.6 billion. Net profit was 18.1% higher than the previous year, at CNY 12.67 billion.

2015 2016 2017 2018
Revenue 30,138 53,722 92,761 106,595
Gross profit 5,471 9,842 17,981 21,513
Gross profit margin % 18.2% 18.3% 19.4% 20.2%
Pre-tax Profit 2,875 6,204 12,774 14,959
Net profit 2,289 5,170 10,735 12,674
Research & development 259 212 331 549
% revenue 0.9% 0.4% 0.4% 0.5%

(Source: Prepared from Geely Automobile Holdings Group annual report, units million CNY)

吉利汽車控股の売上高および純利益推移

 

 

 



CASE Strategy: Strengthening the organization through in-house development and collaboration with other companies

 For Geely, 2018 marked the beginning of the NEV (new energy vehicle) era, and at the 2018 Beijing Motor Show, Geely announced that Geely itself was the top runner in new energy technologies. According to the 2018 edition of the Geely Holding Group Social Responsibility Report, the company’s corporate average fuel consumption reached the level of 5.6 liters / 100 km. With a view to the full electrification of its product portfolio in the future, Geely is planning to release more than 30 NEV and energy efficient models in the next three years as well as a fuel cell vehicle (FCV) in 2025. Furthermore, Geely Holding Group’s hybrid technology approach points to MHEV (mild hybrid vehicles), HEV (hybrid electric vehicles) and PHV (plug-in hybrid vehicles).

 As a prerequisite to electrification, Geely is putting in place a complete system including the construction of its own battery plants as well as forming joint ventures or alliances with major battery manufacturers. In the connected realm, the company is chiefly forming alliances with outside suppliers as its main strategy. As for sharing and mobility services, in addition to developing a sharing service using NEV vehicles called Cao Cao ride hailing service operated by Hangzhou YouXing Technology Co. Ltd., Geely established a joint venture with a Daimler subsidiary to provide premium vehicle dispatching services using high-end Mercedes-Benz vehicles.

Electrification

Construction of in-house battery plants in Zhejiang and Hubei provinces ・ According to the Zhejiang Province Economics Information Bureau, the second phase of a commercial vehicle drive battery and research institute project in Jinhua city, Zhejiang province, began in March 2017.
・ In July 2018, Geely Holding Group signed the “10GWh drive batteries and modules for high performance vehicles investment project” agreement with Zhengzhou city, Hubei province.
・ With a total investment of CNY 8 billion, production will begin in Zhengzhou city in 2020. Facilities include a production line for batteries and modules, a research center, a general administration building, and a logistics center.
Joint venture established with CATL ・ In December 2018, Geely Holding Group subsidiary Zhejiang Jirun Automobile Co., Ltd. (Zhejiang Jirun) and Contemporary Amperex Technology Co., Ltd. (CATL) held a signing ceremony for the establishment of a joint venture. The amount of registered capital was CNY 1 billion, with shareholding ratios of 51% for CATL and 49% for Zhejiang Jirun. The joint venture will mainly conduct research and development, manufacturing and sales of battery cells, modules, and packs.
・ In April 2019, an NEV battery project for the production of 24GWh high performance batteries and modules by CATL and Geely Holding Group was registered in Hangzhou city. The total investment amount was CNY 20 billion (CNY 10 billion in the first phase).
Joint venture established with LG Chem ・ Geely Holding Group subsidiary Shanghai Maple Guorun Automobile Co., Ltd. and LG Chem Ltd. announced the establishment of a joint venture in March 2019. The amount of registered capital was USD 188 million and the shareholding ratio is 50:50. The joint venture will chiefly develop and manufacture EV lithium-ion batteries.
・ Construction of the new company’s plant will begin at the end of 2019, and there are plans to install 10GWh of production capacity by the end of 2021. The batteries will be installed in EVs launched in China by Geely beginning in 2022.
Alliance with major national lithium ion battery manufacturer ・ In April 2019, Hefei Guoxuan Hi-Tech Power Energy Co., Ltd. (Hefei Guoxuan), a wholly-owned subsidiary of Guoxuan Hi-Tech Co., Ltd., and Geely New Energy Commercial Vehicle announced the signing of an alliance framework agreement. The two companies will cooperate to expand the market of NEVs and drive battery systems. Both will share market resources and focus jointly on the development of large customers and obtaining orders for buses.
Alliance for hybrid vehicles with Hunan Corun New Energy ・ Hunan Corun New Energy Co., Ltd. (Hunan Corun), which in 2011 acquired Panasonic Corporation’s Hunan plant, and Geely Holding Group announced an alliance agreement in April 2018. The two companies will collaborate in the areas of hybrid vehicles and their core components. Geely Holding Group will lead the development, manufacturing, and quality assurance of the alliance models, and based on the alliance’s strategic alliance plan, the two companies will invest in production facilities for energy saving HEVs and PHEVs as well as NEVs. Hunan Corun will be responsible for performance development and other technical support of the hybrid drive systems and battery packs (including management system) installed in the alliance models.
・ In October 2018, Hunan Corun announced that it will issue shares to Shanghai Maple Automobile Co., Ltd. (Shanghai Maple) and acquire 36.97% of the shares of Corun Hybrid Technology Co., Ltd. (CHS) held by both companies. After the acquisition, CHS shares will be 87.99% owned by Hunan Corun, 2.97% by Geely Holding Group and 8.13% by Shanghai Maple.
Battery Research Institute project ・ In April 2019, Geely Technology Group and the Xiuzhou District government in Jiaxing city, Zhejiang Province, held a signing ceremony for the NEV battery research institute project alliance. The total investment in the project is CNY 3 billion and there are plans to build facilities including a battery cell R&D center, an electric power system R&D center, an analytical testing center, and an advanced technology center. The project will have more than 1000 high-level staff members.

 

Autonomous driving

Autonomous driving technology, machine learning ・ In March 2018, Autoliv, Inc. and Zenuity AB announced the development and production of a Level 3 autonomous driver-assistance systems for Geely Auto.
・ ADAS (advanced driver-assistance systems) and software development company Zenuity AB, a joint venture of Volvo Cars and Autoliv spin-off Veoneer Inc., became a designated supplier of Geely in June 2019, and will be able to supply products to the various Geely Group brands through Veoneer. Zenuity can also sell to other OEMs.
・ In August 2019, Zenuity AB announced an alliance with CERN (European Organization for Nuclear Research) for the purpose of developing high-speed machine learning applied to autonomous vehicles. This is the first alliance of CERN, a nuclear research institution, with an automotive company.
Alliance with AutoNavi ・ In September 2018, Alibaba subsidiary AutoNavi Software Co., Ltd. and Geely announced a full-scale partnership in the field of high precision maps and both will help to develop intelligent driving. AutoNavi’s navigation maps are used in Geely Auto’s intelligent eco-system “GKUI”.

 

Connected

Announcement of production models using 5G and C-V2X in 2021 ・ In March 2019, Geely Holding Group, Qualcomm Incorporated subsidiary Qualcomm Technologies Inc. and Gosuncn Technology Group Co., Ltd. (Gosuncn) signed a partnership agreement and at the same time announced the deployment of 5G and C-V2X (cellular vehicle to everything) in 2021 on production vehicles. Qualcomm Technologies and Gosuncn will supply 5G and C-VSX products based on Qualcomm’s automotive 5G platform to Geely.
Alliance with Baidu ・ In July 2019, at “Baidu Create 2019”, Baidu and Geely Holding Group announced an agreement for the development of AI technologies such as connected car, smart driving, smart home, and E-commerce for automobile and mobility applications.
Alliance with Tencent ・ In November 2017, Tencent Holdings Limited and several automotive OEMs (Geely Auto, GAC Motor, Chongqing Changan Automobile, Dongfeng Liuzhou Motor, and BYD) announced the “AI in Car”, a system of five functions such as intelligent voice service, contents service, and operational value-added service with a combined AI and eco-system base.
・ In June 2019, Geely Holding Group, focusing on connected and intelligent car technologies, announced the signing of a strategic alliance between its ECarX subsidiary, which develops digital cockpit and active safety products, and Tencent Holdings Limited subsidiary Tencent Auto Intelligence (TAI).
Alliance with major e-commerce company JD.com, Inc. ・ In March 2018, Geely announced a strategic alliance agreement with major e-commerce retailer JD.com, Inc. (JD). Geely’s new vehicles will adopt JD’s IoV solutions, giving multi-faceted access to JD’s service platform including AI, IoT, and big data. By integration with JD’s automotive service resources, intelligent mobility services such as voice recognition, location service, intelligent warnings, vehicle management, and data analysis will be provided.
Alliance with China Telecom ・ In November 2018, Geely Holdings Group and China Telecommunications Corporation (China Telecom Group) announced a strategic alliance agreement. The companies will cooperate in fields including information architecture, V2H (vehicle to home), cloud computing and big data, 5G and V2X, edge computing, and overseas businesses.

 

Sharing

Deployment of NEV sharing service ・ In May 2015, Geely Holding Group company Hangzhou YouXing Technology Co., Ltd. established Cao Cao ride hailing service as the first NEV sharing service in China. As of September 2019, it was operating in 41 cities.

 

Weight reduction

Production facilities for new materials ・ In March 2018, Geely announced that Fujian Haiyun New Material Technology Co., Ltd., a wholly-owned subsidiary of Fujian Haiyun Automatic Equipments Co., Ltd., will build a manufacturing site for new materials with an investment of CNY 1.2 billion in the Yiwu Zhejiang Economic and Technological Development Zone. The plant will supply materials to Geely New Energy Commercial Vehicle Co., Ltd.
・ In the first phase, the manufacturing site of 160,000 square meters will include two production lines, one for automotive SMC (sheet molding compounds) material products at a capacity of 400 tons per year and another line to manufacture carbon fiber thermoplastics. The company is aiming to start construction and begin operations within two years. In the second phase of construction, four production lines for SMC products and four lines for carbon fiber products will be set up on a 90,666 square meter site.

 

 

 



Geely Automobile Holdings sales: Continued growth in domestic and export markets, but 15% decline in unit sales in first half of 2019

(units)

2014 2015 2016 2017 2018 Jan.-Jul.
2018
Jan.-Jul.
2019
China 358,130 484,363 744,191 1,235,361 1,473,070 757,931 613,061
Export 59,721 25,734 21,779 11,755 27,768 8,699 38,619
Total 417,851 510,097 765,970 1,247,116 1,500,838 766,630 651,680

(Source:Created by MarkLines based on Geely Automobile Holdings annual report and interim report.)

Domestic sales and export analysis

 Geely Automobile Holdings, which had set a goal of 1 million unit sales in 2017, surpassed the goal with actual total sales of about 1.25 million units that year. Even after the Chinese tax reduction policy that applied to passenger cars with engines smaller than 1.6L ended at the end of December 2017, sales continued to grow, and in 2018 total sales increased 20.3% compared to the previous year, exceeding 1.5 million units. In the contracting Chinese domestic market, Geely was able to achieve double digit growth of 19.2% over the previous year, to 1.473 million units.

 The SUV Boyue, introduced to the market in the first half of 2016, was a big hit and can be said to be a factor contributing to the sales increases in recent years. Sales (factory shipments) of the Boyue were about 109,000 units in 2016, about 287,000 units in 2017, and about 256,000 units in 2018. In September 2019, the SUV Boyue PRO with a small displacement engine was launched. This model is equipped with Aisin’s 6-speed automatic transmission and Level 2 autonomous driving technology. From 2017, new models of the SUVs Xingyue and Binyue, the sedan Binrui, and the first MPV Jiaji were introduced, and except for the Binrui all are being developed as HV (hybrid vehicles) and PHV (plug-in hybrid vehicles). Furthermore, the company plans to launch the high-end EV brand Geometry with the release of 10 models by 2025.

 At the beginning of 2019, Geely set a sales target of 1.51 million units, but revised this downward to 1.36 million units in July. According to an announcement by Geely Automobile Holdings, sales in the period January through September 2019 fell 16.0% to 958,110 units, and in September alone, year-on-year sales decreased significantly, by 9%, to 113,832 units.

 As for exports, sales declined every year through 2017, but in the first half of 2018, sales more than doubled to 27,768 units. In the first half of 2019 (January through June), sales increased more than 4 times compared to the same period in the previous year, to 38,619 units. The main export models are the SUVs Boyue and Vision; these two SUV models account for 91% of the exports.

博越 嘉際
Boyue Jiaji

Overseas expansion

 On the subject of overseas expansion, as of the end of June 2019, the company had dealerships and service centers in 249 locations in 16 countries. Belarus, in which a joint venture assembly plant with an annual capacity of 60,000 units started operations in 2017, is the largest export destination and where Boyue-based Atlas models for the Russian market are produced. In 2019, the company announced a design center in Coventry, England in February and an engineering R&D center in Frankfurt, Germany in May. (With these, the company has established a global network of 5 design centers and 5 engineering R&D centers)

 

Geely Automobile Holdings sales by country

(units)

2015 2016 2017
Belarus N/A 4,430 4,071
 Sri Lanka 4,598 1,866 1,455
Iran N/A N/A 900
Argentine N/A 436 837
Sudan 470 745 791
Egypt 3,559 4,800 586
Oman 2,162 1,222 550
UAE 597 330 530
Cuba 1,628 1,785 401
Bahrain N/A N/A 304
Saudi Arabia 6,965 3,893 N/A
Chile 985 N/A N/A
Ukraine 816 N/A N/A
Algeria 619 N/A N/A
Uruguay 526 N/A N/A
Kazakhstan 400 N/A N/A
Others 2,409 1,785 1,330

(Source: Created by MarkLines based on Geely Automobile Holdings annual report.)

 

吉利汽車控股の輸出台数推移

 

Major overseas trends

Belarus CKD plant operation ・ In November 2017, the CKD plant of the Geely and Belarusian state-owned company BelAZ joint venture, BelGee, started operations. The production site has an area of 118 hectares and production capacity is 60,000 units per year. This is the first Chinese joint venture company in the country, and total investment was over USD 330 million. The JV is mainly responsible for the production of vehicles for export to Russia and the entire CIS regional market.
・ The SUV Atlas sold in Russia is based on the Boyue.
Germany Establishment of R&D center ・ In May 2019, Geely announced the establishment of an R&D center, Geely Auto Technical Deutschland (GATD) in Raunheim near Frankfurt Airport. To improve its presence in the NEV field, the company plans to hire about 300 engineers and technical specialists in the next few years.
UK Establishment of design center ・ In February 2019, Geely announced the opening of a global design center in Coventry, England: Geely Design UK. Over the next five years, it will expand to include around 100 designers and support staff.
・ The design center will support the in-house design functions of Geely, Lynk & Co, Proton, and LEVC.
Norway Introduction of LEVC’s EV taxi ・ In January 2018, the company chose Autoindustri AS of Oslo as an importer of LEVC EV taxis.
Brazil Suspension of import operations ・ In April 2018, Geely announced the temporary suspension of import operations in Brazil. In April 2016, the company had temporarily withdrawn from the Brazilian market.
Philippines Sales launch of SUV by Sojitz sales agent ・ In July 2019, Sojitz G Auto Philippines Corporation (a wholly owned subsidiary of Sojitz Corporation) was established and began the importation and selling of Geely brand automobiles in the Philippines.
・ In September, 2019, Sojitz G Auto Philippines Corporation announced the sales launch of the compact SUV Coolray.

 

 

 



Geely Holding Group production sites: expansion of existing facilities, construction of new plants

 At a press conference at the 2018 Shanghai Motor Show, after announcing the electrification of each of its platforms and the introduction of various types of environmentally friendly vehicles, Geely asserted that it will accelerate even more the expansion of existing plants and the construction of new facilities with NEV manufacturing in mind.

 Many of the new plants will be located in Zhejiang province where Geely Holding Group is headquartered, especially in Ningbo city, a port city south of the Yangtze River delta. Ningbo city aims to become an intelligent city and is planning the installation of 20 thousand 5G base stations by 2022 to support all industries. Moreover, many of the other production sites (Chengdu city in Sichuan province, Yiwu city in Zhejiang province, Chongqing city) are at the termini of international train lines (to central Europe) which is advantageous for global expansion. In addition, the production site in Belarus is a conduit to central Europe.

 

Existing plants in China (for the Geely、Lynk & Co、Proton、Lotus、LEVC、Yuan Cheng Auto brands)

Location Production capacity (planned), thousands Remarks

Zhejiang
Province

Ninbo Beilun 150 Established in August 1999. Production of Geely’s Emgrand series.
Hangzhou Bay 300 The company signed off on an 80,000 unit expansion plan in May 2019.
Chunxiao 300 In addition to Geely Auto models (gasoline vehicles, hybrids, and plug-in hybrids) Proton brands are manufactured here.
Taizhou

Luqiao
(King kong)

160 Operations started in April 2019. CMA (compact modular architecture) platform vehicles (Lynk & Co, Volvo X40, Polestar 2 (from 2020)) are manufactured here.
Linhai 300 Through an expansion project signed in December 2016, connected cars and NEV related technologies will be promoted at the Linhai industrial park.
Jinhua Yiwu 100 In August 2018, production was approved for 30,000 units of range extender MPVs. In December 2018, production of the LEVC TX5 began.
Hangzhou

Dajiangdong
AMA Factory

100 Production of Geometry brand. The 2nd phase project started in the latter half of 2018. The company plans to produce EV sedans (80,000 units) and small gasoline models (20,000 units).
Hunan Province Xiangtan 320 Plant expanded for HV and PHV cross-over production.
Sichuan Province Chengdu 130 The plant where Geely Automobile’s first SUV model was manufactured.
Nanchong 100 Production started in July 2017. The plant was previously Dongfeng Nanchong Automobile Co., Ltd. Small trucks and buses are manufactured here for NEV commercial vehicle brand Yuan Cheng Auto. The 2nd phase project started in June 2017.
Shaanxi Province Baoji 240(600) According to the Baoji City Automotive Industry Development Action Plan, the annual production is set to 600,000 units by 2022 after completion of the 2nd phase.
Shanxi Province Jinzhong 200 Geely Automobile models and the Geometry A are manufactured here.
Hebei Province Zhangjiakou 200 Established in 2017, Lynk & Co models are produced at this plant.
Guizhou Province Guiyang 300 This plant is capable of manufacturing PHVs, BEVs, gasoline vehicles and methanol-fueled vehicles.
Shandong Province Jinan 120(300) In April 2017, a project to expand production capacity to 300,000 units was concluded with Xi'an Gaoxin District.

((Source: Based on Geely Automobile Holdings annual report and other various reports (As of Sep. 2019))

Note)LEVC(London Electric Vehicle Company)

Production plans

Location Planned production capacity, thousands Remarks
Zhejiang
Province
Huzhou Changxing 150 Range extender EVs (130,000 units), HV (20,000 units)
Ningbo Hangzhou Bay PMA factory 300 BEV model in 2020
Hangzhou Bay DMA factory 300 Mid- and high-end passenger cars, total investment CNY 13 billion
Hangzhou Bay Geely Auto Parts co.,Ltd. 50 Production of NEV passenger cars (2 models) at affiliated supplier plant, operations to start in June 2021.
Yuyao 300 Project announced in April 2019.
Meishan 300-400 Total investment of CNY 6.7 billion in 2020.
Shaanxi Province Xi’an NEV factory 100 2020 (first term)
Hubei Province Wuhan 150 In 2021, production of Lotus models.
Jiangxi Province Shangrao 100 Production of NEV commercial vehicles.
Sichuan Province Chengdu BMA factory 300 Planning production of 3 gasoline models and 1 NEV model.

((Source: Based on Geely Automobile Holdings annual report and other various reports (As of Sep. 2019))

 

 

 



JV with Daimler to launch smart EVs in global markets in 2022

 In February 2018, Geely Holding Group Chairman Mr. Li Shufu became the Daimler Group’s largest single shareholder and since then the relationship between Geely Holding Group and the Daimler Group has deepened. In October 2018, the companies agreed to establish a premium mobility services joint venture company – a ride-hailing service using high-end Mercedes-Benz vehicles. In March 2019, it was announced that production of the next-generation Smart will take place in China, and the vehicles will be launched in global markets in 2022. In the mobility field, Geely Holding Group together with Daimler has invested in urban air mobility (air taxi) company Volocopter GmbH.

Establishment of premium mobility joint venture ・ In October 2018, Daimler subsidiary Daimler Mobility Services and Geely Holding Group agreed to the formation of a premium mobility services joint venture company. The service to be deployed from certain cities in China will initially use high-end Mercedes-Benz S-Class, E-Class, V-Class and Maybach models. In the future, the company plans to introduce high-end Geely Group electric vehicles.
・ In May 2019, the 50:50 joint venture, Weixing Technology Co., Ltd., was established, with headquarters in Hangzhou city, Zhejiang province.
In 2022, launch smart in global markets ・ In March 2019, Daimler Group and Geely Holding Group signed an agreement to establish a joint venture for the global development of the smart brand. The next generation smart, which will be an EV, will be produced in China, with launch in global markets planned in 2022. In the new organization, the Mercedes-Benz global design division will be responsible for styling, and Geely’s global R&D centers will be responsible for engineering.
・ The formal establishment of the 50:50 joint venture with headquarters in China is planned at the end of 2019.
Investment in air taxi field ・ In September 2019, Geely Holding Group invested in air mobility development start-up company Volocopter GmbH, which was founded in 2011. Daimler also invested in Volocopter and each company has a 10% stake. The Geely Holding Group will be responsible for production and marketing of Volocopter in China.

 



Production facilities established in Wuhan, Hunan province, for Geely affiliate Proton

 Since 2010, Geely Holding Group has been bringing affiliates into the group by investing mainly in long-established OEMs with poor management one after another, and in June 2017, it reached an agreement with Proton’s parent company DRB-Hicom Berhad to acquire 49.9% of the shares of Proton (Perusahaan Otomobil Nasional Bhd.), Malaysia’s national car maker. In August 2018, Geely and Proton announced a strategic alliance agreement in the NEV field and the establishment of a joint venture company in China. Proton’s Chinese plant will be established in Wuhan city, Hunan province. With Proton becoming an affiliate of the Geely group, Proton’s sports car subsidiary Lotus has become a brand of Geely. According to some reports, the company set a sales target of 100,000 units in Malaysia in 2020.

 

New ASEAN development in view ・ In June 2017, Proton’s parent company DRB-Hicom agreed to Geely Holding Group’s acquisition of 49.9% of Proton’s shares. As a result, 51% of Lotus stock owned by Proton was also transferred to Geely Holding Group.
・ On August 18, 2018, Geely Holding Group and Proton agreed to form a strategic alliance in the NEV field. Further, on the same day, it was announced that the companies would establish a 50:50 joint venture in China. In addition to setting up an assembly plant, the joint venture company will build a sales network in China.
・ According to a report in Paul Tan’s Automotive News in September 2018, Geely granted intellectual property rights for the use, production and sales of Boyue, Binyue and Jiaji to Proton. In addition, Proton has acquired the sales rights in Brunei, Indonesia, Malaysia, Singapore, and Thailand.
・ In December 2018, the SUV X70 was launched in Kuala Lumpur. This model is based on the Boyue.


Volvo Car Group: By 2025, electrified vehicles will account for 50% of sales

PHVのPolestar 1

Production of Polestar 2 planned at Luqiao plant in 2022. (Source:Polestar)

 Since the Geely Holding Group acquired the Volvo Car Group (hereafter Volvo Cars) from Ford in 2010, sales have steadily increased, and in 2018 sales reached 642,000 units, a 12.4% increase over the previous year. In the U.S., where its plant started operations in June 2018, sales were 98,000 units, an increase of 20.6% compared to the previous year. Volvo Cars announced in April 2018 that by 2025, 50% of its sales will be electrified vehicles and from 2019, new electrified vehicle models will be released every year. The platforms to be adopted for these electrified vehicles will be the SPA (Scalable Product Architecture) and the CMA (Compact Modular Architecture).

 In July 2017, the high performance electric brand Polestar was unveiled. In September 2019, a plant with newly furnished test track in Chengdu city, Sichuan province was completed and the PHV sedan with the SPA platform, Polestar 1, started production. In addition, production of the EV sedan using the CMA platform, Polestar 2, will start at the beginning of 2022, and deliveries will begin in June. For the promotion of electrification, Volvo Cars will also introduce a 48V mild-hybrid version of the S60 and others.

 The company’s U.S. Charleston plant was completed in June 2018, and in September of the same year production of the SPA platform equipped S60 began. This model produced in the U.S. was planned for export to Europe and Asia, including China, but due to the effects of U.S.-China trade friction, plans to export to China were cancelled in November 2018. Most of the S60 models produced at the Charleston plant were supplied to the North American market and a portion exported to Europe.

 

Volvo Cars Groupの業績推移 Volvo Carsの地域別小売販売台数

 

Major trends of Volvo Cars

High performance brand “Polestar” ・ In July 2017, the company announced the establishment of the electric high performance brand “Polestar 1” with the Volvo Cars group.
・ The Chengdu Plant in Sichuan which at the time of the announcement was scheduled to be completed in the latter half of 2018 was actually finished at the end of August 2019. At this newly built plant, vehicles will be produced for China and for export to global markets. First deliveries are planned by the end of 2019.
・ In early 2020, production of the EV sedan Polestar 2 is scheduled at the Luqiao plant in Zhejiang province.
AB Volvo (Trucks) ・ The acquisition of AB Volvo shares by Geely Holding Group was completed in June 2018. With this acquisition, Geely Holding group became the largest shareholder. In December 2017, by the acquisition of 88.47 million A shares and 78.77 B shares as agreed with Cevian Capital, the Geely Holding Group acquired 8.2% of the total shares of AB Volvo and 15.6% of the voting rights.
Investment in start-up companies ・ In July 2019, the company invested in Israeli start-ups MD Go and UVeye through the Volvo Cars Tech Fund.
・ The technology of MD Go, which specializes in medical AI, combines real-time data from vehicles at the time of an accident with medical knowledge and automatically provides early or immediate predictions about the type of injury likely to be encountered by emergency personnel at the scene of the accident. The information is provided through a cloud-based platform.
・ The sophisticated technology developed by UVeye to scan for damage, scratches and dents in automatic inspections of vehicle exteriors using advanced technology can also be used to inspect for small defects at the time of factory shipment. The first test of the system is scheduled to begin in the latter half of 2019 at the Torslanda plant in Sweden.
・ In May 2019, the company invested in Varjo, a Finnish high performance augmented reality (AR) headset manufacturer through the Volvo Cars Tech Fund. The Varjo XR-1 headset provides mixed reality (MR) and virtual reality with high resolution. With the built-in high-precision eye-tracking technology, it is possible for the driver to check the driving situation.
・ In March 2019, through the Volvo Cars Tech Fund, the company invested in Zum which provides on-demand ride-sharing services for children. Using Zum’s newest routing algorithms and machine learning, the most efficient route is established and drivers and vehicles are arranged. It will be possible for both parents and schools to track the movement of children in real-time through mobile apps and on-line dashboards.
・ In October 2018, through the Volvo Cars Tech Fund, the company invested in FreeWire which develops charging equipment for EVs. FreeWires’s charging equipment eliminates the inconvenience of low-voltage power and makes quick charging possible.
Joint development of autonomous driving model with Uber ・ In June 2019, the company announced the installation of an autonomous driving system, jointly developed with Uber, in a production model, the XC90.
・ In order to introduce autonomous driving in the early 2020s, the company plans to introduce the next generation models based on the SPA2 platform using the same autonomous driving based vehicle concept.
Partnership with Huawei ・ In April 2019, the company announced a strategic partnership agreement with Huawei Technologies Co., Ltd. (Huawei) for next-generation connected cars in the Chinese market.
・ By introducing Huawei’s application market, the user will be able to use Android’s intelligent connected application. Using Huawei’s intelligent assist service platform, the user will be able to personalize and customize services.

 

Volvo Cars production facilities

Location Production capacity (including planned), thousands Remarks
China Chendu 150 The Volvo plant with the longest history in China. Annual production capacity will increase to 150,000 units with plant expansion.
Chendu (Polestar plant) 30 Completed in August 2019. Polestar 1 is manufactured at this plant. Vehicles produced for the Chinese domestic market and for export markets.
Daqing 300 Production of vehicles using the SPA platform.
Taizhou Luqiao(CMA Plant 200 Operations began in April 2019. Vehicles using the CMA platform (Lynk & Co, Volvo X40, Polestar 2 (from 2020)) are manufactured at this plant.
Sweden Gothenburg 300 Production of vehicles using the SPA platform.
Belgium Ghent 300 Production of CMA platform models (XC40, V40, S60). In the latter half of 2019, production planned for Lynk & Co models.
USA

Charleston,

South Carolina

150 Operations started in June 2018. Production of SPA platform S60 model. From 2021, production of XC90 is planned.
Malaysia Kuala Lumpur(KD) n.a Production of XC40, XC60, S90 and XC90.
India Bangalore(KD) n.a Operations begun in June 2017. Production of XC90, XC60 and S90. XC90 PHV (plug-in hybrid) to be manufactured by the end of 2019.

(Source: Based on Zhejiang Geely Holding Group’s annual report, Volvo Car Group annual report and other various reports (As of Sep. 2019))

 

 

 



Geely Group sales numbers in China (factory shipments)

OEMs Type Model 2016 2017 2018 Jan.-Aug.
2018
Jan-Aug.
2019
Geely MPV Jia Ji - - - - 20,924
SUV Vision S1 0 10,765 67,908 54,159 16,269
Vision SUV 49,447 127,042 113,309 81,197 49,276
Vision X1 0 20,476 11,911 9,945 2
Vision X3 0 31,233 116,944 84,518 53,313
Xing Yue - - - - 9,685
Gleagle GX7 15,298 0 0 0 0
Emgrand GS 60,521 150,584 157,638 109,641 64,410
Bo Yue 109,209 286,885 255,695 177,533 142,960
LYNK & CO - 6,012 0 37,005 0
LYNK & CO 01 - - 89,405 27,810 34,352
LYNK & CO 02 - - 21,751 7,411 15,106
Bin Yue - - 23,361 0 90,783

Sedan/
Hatchback
EC7 17,181 0 0 0 0
EC8 11 0 0 0 0
TX4 1,300 888 0 0 0
Vision 137,687 145,005 143,851 105,743 51,107
Geely King Kong LG-1 63,413 36,726 16,960 14,694 0
Panda (LC-1) 7,178 1,084 0 0 0
CK 260 0 0 0 0
Emgrand 223,781 264,432 246,933 170,843 139,887
Emgrand GL 30,037 124,112 148,531 102,248 54,834
Bo Rui (GC9) 51,828 42,760 19,496 18,289 5,031
Bo Rui GE - - 24,803 11,393 10,703
LYNK & CO 03 - - 9,258 0 26,019
Geometry A - - - - 6,387
Bin Rui - - 33,084 0 53,230
Total 767,151 1,248,004 1,500,838 1,012,429 844,278

Volvo Cars
MPV XC90 392 0 0 0 0
SUV XC60 39,374 38,425 98,030 37,221 62,690

Sedan/
Hatchback
S60 29,608 27,573 19,213 13,011 5,219
S90 968 25,054 52,312 25,381 29,120
Total 70,342 91,052 169,555 75,613 97,029

KANDI
SUV unclassified 0 0 3,064 130 0

Sedan/
Hatchback
KANDI K10 3,185 574 0 0 0
KANDI K11 199 702 0 0 0
KANDI K12 1,499 9,347 1,203 1,202 0
KANDI K17 6,862 4,122 600 600 0
KANDI K22 0 0 398 0 0
KANDI K27 0 0 1,699 69 0
Total 11,745 14,745 6,964 2,001 0
ZHIDOU
Sedan/
Hatchback
D1 11,201 25 0 0 0
D2 9,091 42,342 14,880 13,125 0
D3 0 117 456 372 0
 D2S - - - 0 2,095
Total 20,292 42,484 15,336 13,497 2,095
Geely
Sichuan
Commercial Vehicle
Light trucks 652 5,427 4,749 1,208 4,333
Small trucks 442 12 0 0 0
Small buses (Chassis) 71 21 6 6 0
Heavy trucks 168 140 28 27 7
Large Buses 0 65 112 15 137
Medium trucks 608 563 129 128 27
Medium buses - - - 0 37
Medium buses (Chassis) 20 0 0 0 0
Total 1,961 6,228 5,024 1,384 4,541
Grand Total 871,491 1,402,513 1,697,717 1,104,924 947,943

(Source: Created based on MarkLines' database)

 

 

 



Production Forecast by LMC Automotive: Geely group experience steady growth and produce 2.58 million units in 2022

(LMC Automotive, August 2019)

Geelyグループの生産予測

   According to LMC Automotive's production forecast(August 2019), Geely group production is expected to be 2.2 million units 2019, up 2.2% year-over-year(y/y). Its production will continue to rise and reach 2.58 million units in 2022 for growth of 17.1% compared to 2019.

  Geely Group has a new brand structure, similar to that of VW Group. Volvo is at the top end, while Geely (having consolidated its many brands) sits at the lower end. The group’s new high‐end LYNK & CO brand competes with VW and Ford and features products based on a new platform designed at the Geely‐Volvo joint R&D center (CEVT).

  In 2018, demand for Chinese‐branded SUVs remained strong, accounting for around 55% of the overall segment, with both Geely and SAIC enjoying stellar performances. 

  SUVs are driving Geely’s growth, particularly the Boyue and Vision Series. The group is the clear winner among its local rivals in the Car segment, supported by the EC7 and Emgrand GS/GL. Volvo’s XC60 and S90 have also boosted overall sales. The inaugural models under the group’s new high‐end LYNK & CO brand, the 01 and 02, have made solid contributions, while its first Car model, the 03, has been phenomenally successful since its debut. The Binyue and Binrui have performed exceptionally well so far in 2019 and will drive growth in the future, while the debut of the Jiaji has allowed Geely to gain market share in the MPV segment.

  Polestar, Volvo's electrified performance‐vehicle brand, aims to open 20 stores in China by the end of next year to tap local demand for Premium EVs. The first store will open in the Chinese capital city of Beijing in the third quarter. Polestar plans to open additional stores in nine other major Chinese cities – namely Shanghai, Shenzhen, Hangzhou, Chengdu, Chongqing, Wuhan, Xi'an, Nanjing and Xiamen – before the end of 2020. Volvo made the Polestar Performance a standalone company in 2017 and has rolled out two production models under the brand: the Polestar 1 hybrid coupé and the Polestar 2 all‐electric Midsize sedan. Both vehicles will be produced in China. Volvo also expects to export the two Polestar models from China to Western Europe and North America, though it has not yet set a timeframe to begin shipments.

  The Volvo VEP engine family of 1.5L 3‐cylinder and 2.0L 4‐cylinder turbocharged gasoline engines is projected to become Geely Group’s leading engine family. To comply with China’s increasingly strict fuel‐consumption requirements and NEV quotas, the automaker has added ten BEVs to its production roster. Not only is Geely one of China’s Top 3 NEV manufacturers, it is also one of the leading BEV producers in Asia.

  Geely has begun constructing a CNY9 billion (US$1.3 billion) assembly plant in Wuhan for the production of highend vehicles, including a new Lotus sports car. The Wuhan factory will be the British brand’s first production site outside its main UK base in Norfolk, England. Due to launch production in two years’ time, the plant will have the capacity to build 150k Conventional and electrified vehicles annually. Aside from Lotus, it is not yet clear which other brands under the Geely umbrella will be assembled at the Wuhan site.

  Geely and Daimler established a CNY1.7 billion (US$246‐million) joint venture in the east China city of Hangzhou to offer mobile services in China. Ownership of the new company is split equally between the two groups’ mobility subsidiaries, Geely Technology Group Co. and Daimler Mobility Services. Initially, the mobility venture will use several Mercedes‐Benz models – namely the S‐ and E‐Class sedans, and V‐Class MPVs – to provide premium mobility services in selected Chinese cities. Going forward, the fleet will be expanded to include Geely’s high‐end EVs, according to the joint‐venture agreement signed by Geely and Daimler in October 2018. The mobility joint venture is part of broader cooperation between the two companies, following Geely’s acquisition of a 9.7% stake in Daimler in February last year. In March, Geely and Daimler agreed to establish a 50‐50 joint venture to build next-generation smart EVs. Under the deal, the new partnership will be incorporated in China before the end of 2019, while sales of the new smart EVs will be launched in and outside China in 2022.

  In Europe, following the announcement that Daimler and Geely will co‐operate in order to transform the Smart brand, Slovenian production of the Smart forfour will be phased out by 2022. Renault’s Novo Mesto plant has been building the Smart forfour (which shares underpinnings with the Renault Twingo) since 2014 and output peaked at 50k in 2017. From June 2019, the Novo Mesto plant will only build BEV versions of the forfour, which already suggested that volume prospects would be lower over the next few years (we currently forecast output of just 32k in 2019). It has now been confirmed that the next‐generation forfour models (due in 2022) will be built in China. 

  In addition, Smart’s next‐generation fortwo model (expected 2022) will also be engineered and built in China by the same Geely‐Daimler joint venture. Geely will engineer all new Smart models, although Daimler will provide styling input. All Smart models will be BEVs.

 

Geely group vehicle production forecast by make (LMC Automotive, August 2019)

(units)

COUNTRY GLOBAL MAKE 2016 2017 2018 2019 2020 2021 2022
Geely Group Geely 785,364 1,275,678 1,340,696 1,283,839 1,240,976 1,273,833 1,369,338
Volvo 521,706 572,476 661,038 705,835 690,813 687,835 696,549
LYNK & CO 0 6,524 123,507 175,177 299,471 348,884 380,615
Polestar 0 0 0 1,010 26,565 50,485 60,230
Kandi 10,881 14,732 6,970 9,984 22,708 22,099 28,646
LEVC 1,345 1,125 1,443 3,159 7,969 14,053 19,674
Geometry 0 0 0 10,618 10,913 11,572 12,264
Lotus 1,262 1,436 1,486 1,376 3,049 4,658 6,146
Yuancheng 183 5,287 4,679 6,806 4,204 3,579 3,849
Zhidou 20,315 43,286 15,109 3,502 204 0 0
Geely Group Total 1,341,056 1,920,544 2,154,928 2,201,306 2,306,872 2,416,998 2,577,311
China Geely 780,207 1,274,394 1,334,289 1,262,327 1,214,144 1,243,598 1,337,637
LYNK & CO 0 6,524 123,507 175,177 299,471 348,884 380,615
Volvo 68,302 93,767 135,867 163,286 171,508 175,323 191,982
Polestar 0 0 0 1,010 26,565 50,485 60,230
Kandi 10,881 14,732 6,970 9,984 22,708 22,099 28,646
Geometry 0 0 0 10,618 10,913 11,572 12,264
Yuancheng 183 5,287 4,679 6,806 4,204 3,579 3,849
Lotus 0 0 0 0 1,432 2,209 3,418
LEVC 0 0 0 652 2,224 1,959 2,187
Zhidou 20,315 43,286 15,109 3,502 204 0 0
China sub-total 879,888 1,437,990 1,620,421 1,633,362 1,753,373 1,859,708 2,020,828
Sweden Volvo 203,167 238,888 314,651 285,455 299,815 315,677 263,720
Belgium Volvo 248,751 237,731 199,776 207,542 168,727 148,794 151,319
USA Volvo 0 0 6,257 42,567 43,122 40,561 81,954
Belarus Geely 4,950 213 4,118 18,453 23,349 26,630 28,050
UK LEVC 1,345 1,125 1,443 2,507 5,745 12,094 17,487
Lotus 1,262 1,436 1,486 1,376 1,617 2,449 2,728
UK sub-total 2,607 2,561 2,929 3,883 7,362 14,543 20,215
Malaysia Volvo 1,478 1,913 3,015 5,452 5,661 5,578 5,667
India Volvo 0 177 1,472 1,533 1,980 1,902 1,907
Iran Geely 0 1,065 1,999 1,241 1,496 1,694 1,883
Tunisia Geely 0 0 290 1,818 1,987 1,911 1,768
Russia Volvo 8 0 0 0 0 0 0
Geely 0 6 0 0 0 0 0
Russia sub-total 8 6 0 0 0 0 0
Uruguay Geely 207 0 0 0 0 0 0

Source: LMC Automotive "Global Automotive Production Forecast (August 2019)"
(Note) 1. Data indicate figures of only small-size vehicles, including passenger cars and light commercial vehicles with a gross vehicle weight of under 6 tons.
2. All rights reserved. Reproduction of any data will require permission of LMC Automotive.
For more detailed information or inquiries about forecast data, please contact LMC Automotive.


------------------
Keywords
China, Geely, Volvo Cars, Daimler, Lynk & Co, Geometry, Proton, Lotus, Polestar, LEVC, Yuan Cheng Auto, smart, NEV

<Automobile Industry Portal MarkLines>