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Geely is the giant EV company no one talks about. It’s the parent of Volvo Cars, Polestar, Zeekr, Lynk & Co, and others. Naturally, it’s a complicated company. Now, news is that it’s simplifying a little (or getting more complicated?), in that Zeekr is taking control of Lynk & Co. Zeekr will own 51% of Lynk when all is said and done, and the details of that indicate that Lynk is currently worth about $2.5 billion (18 billion yuan).
The reason for this appears to be to avoid too much competition within Geely World — to not have “product overlap” that has Zeekr and Lynk creating very similar models and making it harder to make a profit.
Combined, Geely wants the annual sales of the two brands to reach exceed 1 million. The two brands combined for about 340,000 sales in 2023.
“Geely Holding (GEELY.UL), which owns the two marques as well as 10 other automotive brands, has pivoted away from its history of aggressive acquisitions to streamlining its operations and cutting costs,” Reuters writes.
It’s all about making these companies more efficient, and more profitable (or reaching profitability). Reuters is apparently working on this and avoiding product overlap across its portfolio. “If we don’t integrate [Zeekr and Lynk], we must face issues such as … redundant investments in many aspects such as R&D, sales, which is stupid,” Gui Shengyue, chief executive of Geely Automobile Holdings, said on a conference call for stock market analysts.
With these changes, Zeekr is supposed to lead innovation within Geely Holding. Lynk’s product team is already reporting to Zeekr CEO Andy An, as of last week.
Zeekr is getting to 51% ownership of Lynk by buying 30% from Volvo Cars and 20% from Geely Holding, and then 1% more via a cash injection in Lynk. Geely will own the other 49% share of the company. In other words, it all gets more complicated in order to simplify things. “Resource sharing would reduce R&D costs by 10% to 20% for Zeekr and Lynk combined, lowering the bill for materials by 5% to 8% and improve capacity utilisation, An told analysts on Thursday. It would also help Zeekr brands to sell into lower-tier cities with Lynk’s sales network there, he added.” Note Jose Pontes’ article yesterday about the best value for money EVs in the C-segment (compact) class in the Netherlands — one of them was the €36,000 Lynk & Co 02.
It should perhaps also be noted that Zeekr has been doing a bit better than Lynk lately. Well, not in volume terms, but in growth terms. (If it was the other way around, I presume Lynk would be buying 51% of Zeekr.) 3-year-old Zeekr sold about 143,000 cars in the first three quarters of 2024, an increase of 81% year over year, while 10-year-old Lynk sold around 196,000 cars in the same time period, an increase of 40%. Naturally, 40% growth is great! But 81% growth is better.
As a final note on Geely, it became a top 10 automaker globally about 6 months ago. With this kind of growth, though, it should be climbing the list fast.
Some more recent Zeekr stories:
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