Geely set to un­veil mid-tier brand

China Daily (USA) - - BUSINESS - By BLOOMBERG

Chi­nese bil­lion­aire Li Shufu will test whether there’s room for another global car brand by in­tro­duc­ing a new mar­que next week, built on tech­nol­ogy jointly de­vel­oped by his two car com­pa­nies, Geely Au­to­mo­bile Hold­ings Ltd and Volvo Cars.

The new brand, called Lynk & Co, will be un­veiled on Oct 20 in Berlin and share its un­der­pin­nings with Volvo Cars mod­els. Sales are slated to start in the sec­ond half of next year, with the first model likely be­ing a sport util­ity ve­hi­cle, ac­cord­ing to Geely Auto Chief Ex­ec­u­tive Of­fi­cer Gui Shengyue, de­clin­ing to pro­vide more de­tails ahead of the of­fi­cial an­nounce­ment.

“The new brand car­ries great im­por­tance for Geely’s devel­op­ment,” Gui said in a tele­phone in­ter­view on Thursday. “We are cur­rently com­pet­ing against other lo­cal car brands, as well as high-end brands with Volvo Cars.” Lynk & Co will help Geely fight against other mass-mar­ket foreign brands, he said.

The new mid-tier brand Gui Shengyue, comes about two years af­ter Li killed three sub-brands and uni­fied its mod­els un­der the Geely name­plate. The new mar­que, to be pro­duced in China but dis­trib­uted glob­ally, will al­lowGeely to com­pete in the lower end of the mar­ket while free­ing Volvo Cars to fo­cus on the pre­mium end.

Even so, any new brand would have to fight for con­sumer ac­cep­tance in a mar­ket crowded with more than 100 pas­sen­ger-ve­hi­cle name­plates. Geely’s Lynk & Co will join new­com­ers such as Borg­ward Group AG, a de­funct Ger­man brand re­vived by Chi­nese State-owned BAIC Group, and a host of elec­tric ve­hi­cle star­tups in try­ing to carve out a niche.

Geely has some ad­van­tages be­cause the new brand would have ac­cess to a plat­form and tech­nol­ogy from Volvo, and it may have bet­ter in­sight as a Chi­nese com­pany in how to tap growth in faster-grow­ing smaller cities, said Bill Russo, man­ag­ing di­rec­tor of Gao Feng Ad­vi­sory Co.

“The mar­ket is not ask­ing for yet another brand, un­less it brings a clear and unique propo­si­tion,” Russo said. “I as­sume Geely has learned a lot from its pre­vi­ous failed multi-brand strat­egy which they’re un­likely to re­peat.”

Li pur­chased Volvo Cars from Ford Motor Co in 2010 for $1.5 bil­lion and has re­ju­ve­nated the Swedish au­tomaker with an $11 bil­lion mod­ern­iza­tion and in­vest­ment pro­gram. The com­pany un­veiled the XC90 in 2014, the first model wholly de­vel­oped un­der Geely’s own­er­ship, fol­lowed by the re­vamped S90 lux­ury sedan.

We are cur­rently com­pet­ing against other lo­cal car brands, as well as high-end brands with Volvo Cars.” chief ex­ec­u­tive of­fi­cer of Geely Auto

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