TAIZHOU, China / SHANGHAI (Reuters) – Chinese carmaker Geely plans to use a platform developed with input from Volvo to build new models in Malaysia for its partly owned Proton brand, a strategy that shows how it aims to accelerate its push to become China’s first global auto giant.
Workers are seen on a production line for Polestar, Volvo and Lynk & Co cars at a Geely factory in Taizhou, Zhejiang Province, China July 29, 2020. REUTERS / Yilei Sun
The yet to be finalized plans for Proton are just one part of a Geely project to upgrade factories at home and abroad using common platforms. It’s perfect with Volvo since 2013. Geely bought the Swedish brand 10 years ago for $ 1.8 billion – a deal that raised its international profile and sent shockwaves through the global car trade.
Senior Geely officials and engineers told Reuters that a project called Compact Modular Architecture (CMA) will allow them to develop, design and build different types of compact cars with the same mechanical layout faster than before – and at lower costs.
They said that CMA, together with a platform for smaller cars, known as B-segment Modular Architecture (BMA) that Geely plans to roll out for Proton, allowed them to take advantage of the Swedish automaker’s technologies and Geely’s capabilities. in cost control, supply chain management and local production.
“CMA will be at the core of Geely’s future architectural design … We learn technologies and build talents by developing them,” said Li Li, vice president at Geely Automobile Research Institute, confirming the Proton plan during an interview in Ningbo, ten south of Shanghai. Li declined to disclose details about general investment, financial goals or a timetable for expansion plans.
Since its inception in 1986 in Taizhou on the East Coast as a maker of refrigerator parts, Geely has grown into one of the largest players in China, the largest car market in the world for about one in three passenger cars sold across the planet . Geely now sells more than 2 million cars a year across all markets, and ranks it not far from the top 10 motorists by unit sales.
The CMA platform will allow Geely and Volvo in particular to design cars faster and more cost-effectively, Li said, delivering a technological leap toward a higher market share at a time when the auto industry must embrace a future with electric and autonomous power transport.
(Graph: Pedal to the metal: Geely’s car sales 2010-2020, here)
GLOBAL AMBITIONS
Like Geely – an Anglicization of the Chinese word for ‘happiness’ – household colleagues Great Wall Motor (601633.SS) and GAC (601238.SS) are distributed with their own versions of car platforms, and have greater ambitions for selling cars in major western markets.
But grand plans have been postponed, or simply canceled, amid a lack of practical preparation, analysts have said, against a backdrop of years of trade tensions between China and the United States that have roiled the global economy. At the same time, attention has shifted to dealing with stagnant home sales because the pace of China’s growth is slower.
In its quest for global automaker status, Hangely-based Geely is now in talks to merge Volvo Cars with its Hong Kong-listed Geely Automobile (0175.HK) – worth about $ 22 billion by market value, bigger than famous names like Fiat Chrysler Automobile (FCHA.MI) and Nissan Motor (7201.T).
Like the 49.9% stake it acquired three years ago in Proton, the broader Geely Group – Zhejiang Geely Holding Group [GEELY.UL], led by Taizhou-born billionaire Li Shufu – now includes a 9.7% stake in Daimler AG of Germany (DAIGn.DE) and a majority stake in the British sports car brand Lotus.
And that while giants of Toyota Motor Corp (7203.T) to Volkswagen AG (VOWG_p.DE) and General Motors Co (GM.N) have followed similar shared platform projects for their respective markets, Geely’s strategy is a first for a Chinese company.
The automaker plans to develop all of its future models for the Geely and Lynk & Co brands on CMA as well as other related product platforms, such as BMA. It is also developing a new architecture to accelerate the launch of pure battery electric cars with intelligent connectivity features, said Li, a former Ford (UN) engineer.
In addition, Geely wants to change the development of next generations of some popular existing models, such as Borui and Emgrand sedans, to those architectures, he said. It takes about 18 months for Geely to significantly change a CMA-based car, versus 24-30 months to do so on a non-CMA-based model.
Using CMA, plant managers can switch the production of different models to maintain flexible overall tariffs for capacity utilization at production line, said Oskar Falk, the Volvo training head at Geely and Volvo’s first joint production site in Taizhou.
The plant already exports Volvo Polestar 2 electric sedans to the United States and Europe, and is preparing to make Volvo’s first battery-powered electric car, Falk said.
Geely also has plans to start exporting China-made Lynk & Co 01 SUVs to Europe this year.
Report by Yilei Sun and Brenda Goh; Edited by Kenneth Maxwell
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