China’s Geely Auto eyes expansion in overseas markets after Proton investment
The production of some popular vehicles by Geely Automobile is likely to be transferred to Malaysia after parent company Geely Group struck a deal to acquire a 49.9 per cent stake in struggling Malaysian car manufacturer Proton.
It hasn’t been decided whether the Geely or Proton brand will be applied to new models designed by Geely but produced by Proton, “but such a cooperation model is highly possible between the two,” Geely Auto chief executive Gui Sheng Yue said on Thursday after its annual general meeting in Hong Kong.
“The cooperation will greatly help Geely Auto expand to markets in Southeast Asia and 2019 will see strong growth for our overseas markets,” he said.
The deal, announced on Wednesday, came as a dramatic about face after senior executives of the Chinese car giant had previously said they dropped their bid for Proton.
Lo Ka-leong, an auto industry analyst from Kim Eng Securities, highlighted benefits of the cooperation model. “In our view, Proton will likely adapt Geely’s cars and rebadge them under its own brand for launch in Malaysia,” he said.
“Longer term [the deal] could facilitate overseas expansion for Geely and its new car brand Lynk & Co,” Lo added.
Lynk & Co, the first hybrid vehicle brand under Geely, will be launched in mainland China in the fourth quarter of this year. In 2017 there will be 15,000 units produced and this is expected to increase to 20,000 units next year. By 2020, Lynk & Co will account for about 40 per cent of Geely’s total production target of 2 million cars.
“The hybrid vehicle Lynk & Co will be competitive even in European and US markets,” said Gui. “We will endeavour to expand in global markets. What defines a good product is that it not only sells well in developing countries but also in developed regions.”
Geely’s shares added 0.34 per cent to HK$11.7 in Hong Kong trading on Thursday.