Geely’s Sino-European Empire, from Road to Space

It was not the world of refrigeration and the world of refrigerators that led Li Shufu to global success. In fact, it is actually the car that made this native of Taizhou (central eastern China) a businessman who is now among the most influential bosses on the planet.

It was in 1997 that this son of rice farmers started producing cars and created Geely Auto and the first models for the Chinese market. The manufacturer is developing its business at a breakneck pace. In 2002, it was ranked in the top 10 of the best companies in the country (in terms of internal trade), and in 2005 it made a sensational debut on the Hong Kong Stock Exchange.

The alliance with European companies as a growth engine

A prophet in his country as well as in certain regions of Southeast Asia, Geely already wants much more. Founder Eric Li’s eyes then turned to the West, especially to Europe, where he hoped to slowly but surely expand his hunting ground.

It all started in the late 2000s. While talking to Ford’s CEO, he suggested that the latter should buy Volvo, one of his brands that was in poor condition at the time. The agreement was officially signed in 2010. The Swedish company moved from the American flag to the Chinese fold for 1.3 billion euros, a sum four times less than the amount that the giant invested in the blue oval 11 years earlier. A very nice catch, therefore for Eric Li.

It is also true since this takeover that Geely has seen its international wings grow. “The merger with Volvo was a crucial step in the development of Geely”says Peter Wells, a researcher in the automotive industry at Cardiff University.

From Volvo to Smart via Lotus and the creation of Lynk & Co

Geely is now the majority shareholder in Volvo, which has become its premium reference brand, but also in Polestar, its high-performance division. The Chinese buyer’s appetite is clearly insatiable. For six years he has also owned 70% of the shares in Lynk & Co, a disruptive car brand, which he co-founded with Volvo Cars. Lynk & Co markets electrified models (the rechargeable Lynk & Co 01 hybrid, for example, landed in France in late 2021) only on the internet or in “clubs” and innovates with rental formulas that encourage car sharing.

Since 2017, he has also owned Lotus, the legendary British sports car team, whose sales he intends to multiply by ten in the coming years and revolutionize DNA by opening its catalog to more mainstream segments.

Finally, the Chinese conglomerate is 50% committed to a joint venture with German Daimler. 2022 goal: relaunch of the Smart brand, where the first regular model is a 100% electric SUV named Smart # 1, produced in China, which is likely to leave the factory at the end of the year or early 2023.

After taking control of Volvo and Lotus, Geely is set to relaunch Smart’s career in a joint venture with Daimler – Credit Smart

Geely works as a fine chess player, from asphalt to space

Amplified by its good results, by a turnover of 14.2 billion euros in 2021 (+ 10% compared to 2020) achieved in the punitive context of Covid and the semiconductor crisis, Geely is now proving more winning than ever. In particular, it continues to gain a foothold among the builders of the Old Continent, always them, either directly on European soil or through their bases abroad. In early spring, he entered the capital of Renault Korea Motors, the South Korean subsidiary of Renault, up 34%.

Geely, or more precisely, Zhejiang Geely Holding, has also recently distinguished itself by setting up a joint venture with the German Volocopter last autumn to closely support a flying taxi project.

To want to look at the world from above is actually concrete and serious for Eric Li, now 58 years old and multi-billionaire. The Hangzhou-based industrial group has just confirmed its dream of playing a major role in space, a bit like the Tesla of California. In early June, Geely managed to place the first nine satellites (out of 200 to 250 long-term planned) in low orbit around the Earth, intended to improve navigation and autonomous driving functions for its vehicles.

Geespace, Geely's space arm, has placed the first nine satellites in low orbit around the earth to operate the autonomous functions of its vehicles - Credit DR
Geespace, Geely’s space arm, has placed the first nine satellites in low orbit around the earth to operate the autonomous functions of its vehicles – Credit DR

“No car brand can claim to go on alone,” according to Geely

Faced with this impressive and pragmatic development, some automotive industry analysts believe that it is still difficult to measure the extent of Geely’s future expansion, as most of the companies that Eric Li has invested in have far from delivered their full potential.

One thing is for sure, the daring Chinese dragon seems to be evolving as it pleases, surfing on trends and focusing its global strategy on, among other things, electrification and the autonomous car, and also testing new methods of acquisition, while this by trusting an interdependence between its subsidiaries, which it founded or absorbed. “We are convinced that only through large projects and pooling of resources can we design better products for the end user”said Daniel Li, the current CEO of Geely, a few days ago at an event in Germany, adding that “ no car brand in this new era of ultimate technological upheaval could claim to advance alone. »

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