Summary
- Geely is simplifying its operations by having Zeekr take control of Lynk & Co, with Zeekr owning 51% of Lynk
- Geely aims to avoid competition within its brands and increase annual sales to exceed 1 million
- The move is part of Geely’s strategy to streamline operations and cut costs to reach profitability
- Zeekr is expected to lead innovation within Geely Holding, with Lynk’s product team reporting to Zeekr’s CEO
- Despite Zeekr’s recent growth outperforming Lynk, both brands are contributing to Geely’s climb as a top 10 automaker globally.
Article
Geely, a major EV company that is the parent of Volvo Cars, Polestar, Zeekr, Lynk & Co, and others, is making some changes to its operations. Zeekr is taking control of Lynk & Co, with plans for Zeekr to own 51% of Lynk. This move is aimed at avoiding product overlap within the Geely World, where Zeekr and Lynk might create similar models, potentially impacting profitability. The goal is for the combined annual sales of the two brands to exceed 1 million units, as they only reached about 340,000 sales in 2023.
Geely Holding, the parent company that owns Zeekr and Lynk, among other automotive brands, is shifting its focus from aggressive acquisitions to streamlining operations and cutting costs. By integrating Zeekr and Lynk and avoiding redundancy in investments in areas like R&D and sales, Geely aims to make its companies more efficient and profitable. Zeekr is set to lead innovation within Geely Holding, with Lynk’s product team reporting to Zeekr CEO Andy An following the ownership change.
Zeekr is acquiring 51% ownership of Lynk by purchasing 30% from Volvo Cars, 20% from Geely Holding, and the remaining 1% through a cash injection. This move is intended to simplify operations and reduce costs through resource sharing, which would lower R&D expenses by 10% to 20% and improve capacity utilization. Zeekr brands may benefit from Lynk’s sales network in lower-tier cities, enabling broader market reach.
Despite Zeekr’s recent growth outpacing Lynk’s, both brands have seen increases in sales. Zeekr, a 3-year-old brand, sold around 143,000 cars in the first three quarters of 2024, showing an 81% year-over-year growth. In comparison, Lynk, a 10-year-old brand, sold approximately 196,000 cars in the same period, with a 40% growth. Geely’s rapid growth in the global automotive market positions it as a top 10 automaker, with potential for further climbing the rankings with continued success.
With the changes at Geely, including Zeekr taking control of Lynk, the focus is on driving innovation, reducing costs, and improving efficiency across the company’s brands. By integrating Zeekr and Lynk and leveraging resource sharing, Geely aims to create a more streamlined and profitable operation. The strategic realignment within Geely Group reflects a shift towards a more coordinated and synergistic approach to managing its diverse automotive portfolio, ultimately driving growth and success in the competitive EV market.
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