China’s Zhejiang Geely Holding Group has its fingers in a lot of pies. Having purchased Volvo Cars from Ford a decade ago for $1.8 billion (a fraction of the price the Blue Oval paid), the brand has focused on scooping up troubled brands with global appeal or creating its own. In 2017, Geely purchased majority stakes in Malaysia-based Proton and UK-based Lotus Cars while attempting to turn its own Lynk & Co into a global brand.
Those are supplemental to its cadre of Asia-focused subsidiaries but no less important to its broader aspirations.
Geely has been exceptionally clear that its ultimate goal is to increase its presence around the world while improving its production capabilities. Its latest strategy involves utilizing new platforms developed for Volvo (which was already sharing architecture with Lynk) for vehicles manufactured in Asia under the Proton banner.
Reporting from Reuters suggests the company intends to retool factories across Asia in order to take advantage of the platforms that garnered Volvo so much favorable attention these last few years.
Senior officials and engineers working for the company told the outlet a group “Compact Modular Architecture” (CMA) opened up the door to for the quick development and manufacture of various compact designs with a familiar layout — and for much less money than was being spent before.
They said CMA, along with a platform for smaller cars known as B-segment Modular Architecture (BMA) that Geely plans to roll out for Proton, allow them to harness the Swedish automaker’s technologies and Geely’s capabilities in cost control, supply chain management and local production.
“CMA will be the core of Geely’s future architecture design … We learn technologies and build up talents through developing it,” said Li Li, vice president at Geely Automobile Research Institute, confirming the Proton plan during an interview in Ningbo, south of Shanghai. Li declined to disclose details of general investment, financial targets or a timetable for expansion plans.
From its lowly foundation in 1986 in Taizhou on the east coast as a maker of refrigerator parts, Geely has grown into one of the biggest players in China, the world’s largest auto market accounting for nearly one in every three passenger cars sold around the planet. Geely now sells more than 2 million cars a year across all brands, ranking it not far from the world’s top 10 automakers by unit sales.
Geely also wants to break into Western markets, specifically the United States. However, political tensions between Washington and the Chinese Communist Party, sparked by that entity’s routine involvement in all aspects of business, has made that task exceedingly difficult for all Chinese-based companies. China has also struggled economically for the last couple years, forcing Geely to focus more on home-grown problems. This resulted in numerous setbacks for the company, with one of the biggest being Lynk & Co’s failure to move into Western markets as planned (though Asian exports will come to Europe soon).
Despite increasing its market share dramatically over the past decade, the Chinese automotive conglomerate has now refocused on the fundamentals as demand recedes, if only to ensure it can maintain its strength during hard times and export models out of China for as little money as possible. In addition to platform sharing between its more international brands, Geely eventually wants to slot CMA-based products into every car brands it owns — basically becoming China’s answer to Volkswagen Group.