Business news
Yilei Sun
Tony Munroe
BEIJING (Reuters) – Chinese company Geely plans to launch electric vehicles under a new brand with different brands and sales strategies, people familiar with the matter said, while the Volvo owner plans to take on its main rival EV Tesla with next-generation vehicles.
The brand, positioned in the premium segment and called “Zeekr”, will be housed in the EV entity to be launched from Geely, Lingling Technologies, according to three people, who refused to be named because the plan is not yet public. Reuters reported plans for Lingling last month.
Geely, owner of Volvo Cars and 9.7% of Daimler AG, will launch models under the new brand based on its open source EV chassis, announced in September and called Sustainable Experience Architecture (SEA), the sources said.
It will be a new attempt to increase Geely’s market, and supports the longstanding ambition of founder and president Li Shufu to make premium cars “like Mercedes-Benz” in a bid against EV leader Tesla Inc.
Geely will open showrooms, or “hubs”, in city centers to sell cars at a fixed price, building on the traditions of selling cars through dealerships – marketing tactics launched by Tesla, which last year saw sales grow rapidly in China, the world’s largest car market.
The plan follows a flurry of deals by Geely earlier this year, as the automaker pursues its goal of becoming a leading EV manufacturer and engineering service provider.
“Traditional gasoline cars and electric vehicles are two business race tracks. Geely doesn’t have a clear advantage in electric vehicles at the moment, so it looks like it wants to complete its own innovation by creating a new brand, ”said Alan Kang, an analyst at automotive consultancy LMC Automotive.
Chinese automakers compete extensively with entry-level and mass-market manufacturers, including Volkswagen and Toyota, but EV maker Nio Inc sells cars with higher prices and has BMW as its rival.
Hangzhou-based Geely also plans a wide range of sales and marketing strategies to seek deeper relationships with EV buyers. He will open lifestyle lines for clothing and accessories and launch a car owners’ club, a tactic used by Nio, the sources said.
Zeekr is also considering launching a shareholding plan that will allow customers to become shareholders of Lingling, which management expects to increase sales and the relationship between the brand and customers.
Geely declined to comment.
Many conventional car manufacturers have used a new brand to launch their EV units. Geely’s rivals, including Great Wall and SAIC Motor, have launched their respective new autonomous EV brands.
The government of China has heavily promoted new energy vehicles (NEVs) – such as gasoline-electric, battery-powered, hydrogen fuel cell hybrid cars – in response to chronic air pollution and climate warming, sparking the interest of companies of technology and investors. .
China predicts that NEVs will account for 20% of its annual car sales by 2025, up from about 5% in 2020.