Peter Lyon
November 18, 2024
Late last week, Geely Auto declared that its sibling company Lynk & Co. would be taken over by its luxury electric brand Zeekr. According to reports, the significant reform is the first of several planned reorganisations that Geely plans to implement as part of its continuous efforts to simplify its extensive automotive empire. And Malaysian motorists can expect to see these cars in showrooms as early as late next year.
According to a statement from the company, the merger will “increase talent development, streamline product portfolios, and accelerate technology synergies between the two brands, ultimately leading to greater global sales volume.”
Zeekr will purchase all 30% of Volvo Cars‘ interest in Lynk & Co. as part of the restructuring, along with an additional 20% from Geely Auto. Zeekr will bring its stake up to 51% via a capital infusion, giving it a controlling ownership of Lynk, while the remaining 49% will remain the property of Geely Auto.
The purchase is expected to finalise by June 2025, and the Chinese-Swedish brand is valued at about CNY18 billion (about RM11 billion), according to Reuters.
Zeekr to share R&D with Lynk and Polestar
After the reorganisation, Zeekr is expected to lead the group’s research and development of connected and electric vehicles, sharing that research with Lynk & Co. and Polestar, among others.
According to contacts familiar with the situation, as of last week, the product team at Lynk & Co. began reporting directly to Andy An, the CEO of Zeekr, and talks on parts and technology exchange between the two companies had already begun.
Geely Chairman Li Shifu first hinted at the reorganisation plan in September of this year with the business wanting to reduce redundancies and increase efficiency across all of its brands.
In a conference call with analysts after the news, Andy An stated that resource sharing between the two brands would improve utilisation of its production capacity, lower the bill for materials by 5-8%, and reduce R&D expenditures by 10-20%.
Although there are currently no intentions to incorporate Lynk & Co. into the Zeekr brand, the combination will enable the more recent Zeekr brand to sell its vehicles in areas where Lynk & Co. already has a sales network.
CARLIST THOUGHTS
The Z10 and Z20, Lynk & Co.’s first fully electric models, were just released and they already have the same EV design (and style) as Zeekr’s vehicles. Although it’s uncertain if they will survive into the future, the brand also provides ICE and hybrid versions that are based on various platforms created by Geely and Volvo Cars and will appear in Malaysian showrooms in time.
