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Geely

Volvo’s owner Geely aims to sell 500,000 units of its new Lynk brand vehicles by 2019

PUBLISHED : Monday, 07 August, 2017, 10:27am
UPDATED : Monday, 07 August, 2017, 10:43pm

Lynk & Co., the mid-priced car brand spawned out of Geely Holding Group’s takeover of Volvo Cars, has set a half-million unit global sales target, taking aim at Audi and Lexus as its main competitors.

The brand will have 150 dealerships up and running across mainland China by the end of 2017, ready to sell Lynk’s first midsize sports utility vehicle (SUV), said Lynk’s senior vice president Alain Visser, without disclosing the price of the vehicle.

“When we roll out most of our portfolio [of models] in 2019 to 2020, we aim to sell half a million vehicles around the world,” he said in an interview with the South China Morning Post. “We believe it is a very realistic target.”

Zhejiang-based Geely, founded by billionaire Li Shufu, is leveraging its ownership of Swedish luxury carmaker Volvo to embark on a go-global strategy by marrying European styling and technology to mainland Chinese production costs and manufacturing might.

The Lynk brand, which debuted in Germany late last year, positions itself in the mainstream segment in China, which is currently dominated by foreign brands including Volkswagen, General Motors, Ford and Toyota.

The segment, in which models are sold at around 250,000 yuan (US$37,150) – a price affordable to millions of Chinese middle-class – represents about 45 per cent of the world’s largest car market.

“Our aim is not to offer the cheapest and we will not be the cheapest,” Visser said, adding that about 55 per cent of Lynk’s sales will come from China, its biggest market.

Lynk’s first SUV will be equipped with either a 1.5-litre or 2.0-litre turbo-charged engine.

In comparison, the starting price of an Audi Q3 SUV with a 1.4-litre turbo-charged engine is 239,200 yuan while the Q3’s entry-level 2.0-litre engine vehicle carries a price tag of 279,200 yuan.

The Lexus NS SUV with a 2.0-litre engine starts at about 300,000 yuan.

Geely’s domestic models are currently priced up to about 150,000 yuan.

Geely Auto, the Hong Kong-listed subsidiary of Geely Holding, owns 50 per cent of Lynk, while the parent firm Geely Holding holds 20 per cent and Volvo has the remaining 30 per cent.

Lynk plans to sell vehicles in the United States and Europe after launching in China.

“We can easily expand our dealer network in China,” Visser said. “The challenge is how we expand our network outside China, in the US and Europe.”

In April, Lynk also displayed a prototype for its “03” model sedan.

Over the past weekend, Geely Holding and Volvo also set up a 50-50 joint venture, GV Automobile Technology (Ningbo), to strengthen their tie-up in technology development.

Geely Holding founder and chairman Li said global economies of scale was the goal as the joint ventures facilitated closer cooperation between the brands on shared vehicle architectures, powertrain development and electrification.

In May, Geely agreed to acquire a 49.9 per cent stake in struggling Malaysian carmaker Proton, which also gave it control of British sports car brand Lotus.

Geely said the technology it co-develops with Volvo would be eventually transferred to its Malaysian facilities to support Proton’s transformation, but the company did not provide a time frame.

China’s Geely in about face with decision to buy 49.9pc stake in Malaysia’s Proton

Early this year, Great Wall Motor, maker of the mainland’s best-selling SUV, launched its high-end “Wey” brand as the company actively considers a production line in North America.

Geely Auto’s H shares have climbed 154 per cent so far this year, closing at HK$18.52 (US$2.37) on Friday, following an 84 per cent rally in 2016.

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