Geely group's remarkable rise via tech takeovers

By THOMAS HUONG | 17 August 2017

SHANGHAI: The Geely Group, which launched its first car in 1998 - less than two decades ago, has seen an amazing growth story.

Including Volvo Cars, the group sold over 1.3 million vehicles in 2016.

The group has over 60,000 employees across the world, and was listed in the Fortune 500 for the past six years.

Today, its Hong Kong-listed arm Geely Auto has its headquarters in Hangzhou and nine manufacturing plants in China, with an annual production capacity of 1.07 million vehicles.

The Geely MPV Concept, unveiled at the Shanghai Auto Show 2017, looks sleek and dynamic.
The Geely MPV Concept, unveiled at the Shanghai Auto Show 2017, looks sleek and dynamic.

The rapid rise of the Geely Group is attributed to its entrepreneur-driven culture, as it was founded by 53-year-old Li Shufu who is also the controlling shareholder and chairman.

Li had a successful refrigerator and parts manufacturing business in 1986, before entering motorcycle production in 1993.

Global technology acquisitions

Technology acquisition and a commitment to innovation is at the heart of Zhejiang Geely Holding Group Co Ltd's aspiration to be among the world’s top 10 automotive entities by 2020.

The group takes pride in being the first Chinese automaker to develop its own range of highly-efficient and low-emission engines.


2017 Geely Boyue: Quick test drive in Ningbo

Geely Auto: Carsifu visits Geely's Shanghai facilties

Geely Group now owns the Swedish car company which is a pioneer in autonomous driving technology, and has a vision of no one being killed or seriously injured in a new Volvo car by 2020.

To recap, chairman Li Shufu and the Geely Group made global headlines by acquiring Volvo Cars from Ford Motor in a US$1.5bil (RM6.44bil) deal in August 2010.

It was the first takeover of a premium global car brand by a Chinese company.

Before that, in 2009, Geely Auto bought troubled Australian transmission maker DSI (Drivetrain Systems International) for A$47.4 million (RM160.2mil).

At that time, DSI’s key products were four-speed and six-speed rear wheel drive automatic transmissions, and the company was also developing six-speed front wheel drive gearboxes as well as high torque seven-speed and eight-speed automatic transmissions, hybrid transmissions, dual-clutch transmissions (DCTs) and Continuously Variable Transmission (CVT).

Geely Auto R & D centre in Hangzhou.
Geely Auto R & D centre in Hangzhou.

Another head-line making acquisition was in February 2013, when it bought Manganese Bronze, which was subsequently renamed as the London Taxi Company.

In February 2014, the group also bought Emerald Automotive which specialises in light-weight, low emission and long range hybrid commercial vehicles.

In June 2017, the group struck a deal with DRB-Hicom Bhd under which the latter will acquire a 49.9 per cent stake in national automaker Proton Holdings Bhd for RM460.3mil.

Of the sum, RM170mil will be paid in cash, with the remaining RM290mil in the form of a transfer of Geely’s Boyue sports utility vehicle (SUV) platform to Proton.

The popular Boyue is expected to be used as a base for Proton’s first-ever SUV model.

Also, Zhejiang Geely will be paying 100mil pound sterling (RM540mil) to Proton for a 51 per cent stake in British sports car maker Lotus.

This milestone deal by Zhejiang Geely, which also owns Sweden’s Volvo Cars, London Taxi Company, Lynk & Co and the Geely Auto portfolio of car brands, is also seen as a step by the Chinese automotive group to enter right-hand-drive markets in the Asean region.

Geely cars for quick test drives by Malaysian journalists in Hangzhou.
Geely cars for quick test drives by Malaysian journalists in Hangzhou.

The group has four research and development centres in China, Sweden and the United Kingdom, as well as four design centers in Shanghai, Gothenburg, Barcelona and California.

Presently, there are over 400 designers from 19 countries led by chief designer Peter Horbury, working at Geely Auto’s design centres.

It's also noteworthy that the group is also involved in ride sharing and tertiary education.

It is the first Chinese automaker to enter the ride-hailing market in China, via an investment in Caocao.

It has invested in Beijing Geely University, China’s largest private university, established in 2000, Sanya college (2005), Zhejiang Automotive Technician School (2004), and Hunan Geely Automotive Technician School (2012).

Collectively, these institutes have 40,000 enrolled students with more than 10,000 graduates every year.

The group also established the Zhejiang Automotive Engineering Institute, China’s first graduate school for automotive engineering masters and doctors.