Geely to unveil Volvo venture car next year
Geely Automobile says it will roll out its domestically produced car - developed with Volvo - as early as next year, with a price tag of 100,000 to 300,000 yuan.
The Hong Kong-listed arm of Zhejiang Geely is betting on the rights to use Volvo technology, which will provide a competitive edge in the mid-priced passenger car market.
Zhejiang Geely, which bought Volvo from Ford Motor two years ago, said last month it would jointly develop an indigenous car brand with Volvo and pitch it at a price lower than that of luxury brands Audi and BMW.
'While luxury cars saw the biggest sales growth in the past two years, those costing between 100,000 and 300,000 yuan drew the biggest total number of buyers,' Geely Automobile chief executive Gui Shengyue said yesterday at the annual results briefing.
While Zhejiang Geely signed the deal to make an indigenous model with Volvo, all proceeds from sales of the new car would accrue to Geely Automobile, Gui said.
Some critics have voiced concerns that Volvo's transfer of its technological know-how would weaken its brand, but Gui stressed that the two brands would not intrude on each other's target market.
That's because Volvo will continue to focus on high-end models, while Geely will concentrate on marketing low- to mid-priced cars. Geely, the mainland's third-largest domestic carmaker, expects sales to rise 9 per cent to 460,000 units this year from last year.
Its optimism is despite the China Association of Automobile Manufacturers' latest forecast for car sales to grow less than 5 per cent this year - down from its earlier forecast of 8 per cent.
The carmaker is confident that new product launches this year and continued strong export growth will support sales.
It expects exports to comprise 13 to 15 per cent of total sales revenues, up from 9 per cent last year.
Full-year net profit rose 13 per cent to 1.54 billion yuan (HK$1.9 billion) from 2010, although the firm's inventory increased 38 per cent due to slower sales.
Sales in the first two months of this year edged down slightly from the same period last year. Shares of Geely Automobile closed up 3.82 per cent at HK$2.99 yesterday.
The number of Geely car models mainland government agencies can buy, according to a list by the industry regulator