While You Were Blinking, Geely Bought A Rosy Future
Chinese carmaker Geely is in a quiet and subtle strategic buying race, zipping by under the scrutiny of the media. It seems the company learned the lessons most fail with international acquisitions, to leave well alone.
Geely Quietly Buys & Lays Its Foundation
Tesla is certainly sexy and the news is littered with future eventual, potential, probable, and most likely electric cars from Germany in 5 to 10 to 20 years … maybe. (Get the hint?) In the midst of this, Geely has been quietly planning for its future by strategically buying carmakers in distress. But exactly what do you make of a foreign carmaker that buys a flying car company, Terrafugia, Volvo, Lotus, Lynk & Co, Malaysian carmaker Proton, the London EV Taxi Company, and Yuang Chen Auto?
Since its beginning in 1986, Geely, officially known as Zhejiang Geely Holding Group Co., Ltd, which also means “auspicious” or “lucky,” has come a long way. It is now a Chinese multinational carmaker based in Hangzhou that has been quietly buying carmakers, discreetly building its future. And so far, that future looks pretty prosperous. Most of what the company does happens without much news coverage, which is a good thing since it leaves breathing room for the company. However, it’s a shame when you consider the incredible future potential of the company. And Geely is not alone, either. China has a few other companies we should keep a close eye on, such as BYD, BAIC, SAIC, and NextEV, to name a few off the top of my head.
Future Giant Geely?
Today, Geely is much more than an obscure foreign automaker. Volvo on its squad, doing well, and pushing 100% electrified offerings within a few years. As noted above, it has other established players on the roster as well.
Geely also did what Tata did so brilliantly well — leave the original company and its culture alone. Keep the engineers and bring new blood, but leave the culture alone. (And judging by the rave reviews Jaguar is receiving, we eagerly anticipate the EVs the come soon.)
Today, I would wager most people on the streets have no idea Volvo is Chinese. When people ask, will Americans and Europeans buy cars from Chinese companies? Well, they will certainly buy Volvos.
Buying the Terrafugia flying car company was a giant flag that should also give you a good idea as to where Geely wants to go. Taking a cue from Tesla, Geely is spending wisely to cement its future within the dast-changing automotive and mobility landscape.
Geely Forms Lynk & Co
Red hot on great results and expansion, Geely created its own EV-only company called Lynk & Co. But before you read on, try repeating that name in your head a few times and imagine hearing it without seeing its spelling. Yes, a confusing name to pronounce for Westerners.
And in an era inundated with vague PR pitches, promises of future vehicles that should happen sometime in the future (with little to nothing to show right now), vagueness itself rules over PR. But Geely isn’t doing a PR stunt.
What’s Next For Geely?
Volvo Cars, Lynk & Co, and Geely created a new joint venture technology company to further Geely’s own future technology, deepen its industrial synergies, and provide the economies of scale that will allow these brands to more rapidly develop the next generation of electrified vehicle technology. In order to do that, the company signed a Memorandum of Understanding to share its architecture and technologies internally. This will streamline the R&D, make the process more efficient, and make it all profitable sooner. In the meantime, Volvo already shares its Compact Modular Architecture (CMA), which will soon be added to 40 new Lynk & Co series cars.
There shouldn’t be much bickering between all the companies. This sharing might even spur friendly in-house Geely competition. So far, Geely wisely lets the original company keep the intellectual property rights of its technology, which it shares with the rest of Geely. In the end, the technology is available for Volvo, Geely Auto, and Lynk & Co, via license agreements.
Lastly, to confuse things slightly until you take a step back and see the bigger picture, Volvo took a significant minority shareholding in Lynk & Co. Enough said — you see the interdependence and potential of such a setup. In some ways, it reminds me of the birth of a budding Chinese Mitsubishi company.
Finally, Geely Holding Chairman Li Shufu had this to say: “We will unlock significant benefits across our portfolio by sharing both technologies and next-generation vehicle architectures. I am confident these synergies can be achieved while preserving the separate identities and strategic autonomy of our different automotive brands.”
Geely Buys The Competition, Not Your Average Chinese Company
Keep an eye on Geely. The company has done very well in its 20 years (yes, it’s just 20 years old) and continues to strategically acquire companies that fit its greater mobility plan. Geely is moving forward in a smart way acquiring and especially leaving the original companies alone. Leaving the culture internal and unmolested allows the company to retain certain key elements but with new financial backings.
Geely Buys The World — Final Thoughts
It’s fun watching companies stretch their territories, take on new domains, and go from startup to solid international key players. I’ve watched Tesla come from complete obscurity to what it is today. I test rode the first electric mules from Ford, Nissan, and other carmakers last decade. The one thing I never saw coming was the electric surge from companies like Geely, BYD, and Tata. Although Tata hasn’t delivered much in the EV department yet, I’d keep an eye on this company. In the meantime, Geely has bought its future and is set to be the next Chinese GM.
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