CHINA’S Geely said on Thursday (Nov 14) its premium electric vehicle maker Zeekr plans to take control of Lynk, a sister brand – the first big restructuring move in a planned overhaul for the sprawling automotive group.
Geely Holding, which owns the two marques as well as 10 other automotive brands, has pivoted away from its history of aggressive acquisitions to streamlining its operations and cutting costs.
Group chairman Eric Li told staff in September that deep integration was needed to improve efficiency and reduce costs. All brands in the group should clarify how their models are positioned so that overlap can be avoided, he added.
Zeekr and Lynk have been criticised for having some similar products and pricing, cannibalising each other’s sales.
Geely said it wants Zeekr and Lynk to form a new energy vehicle manufacturing group with combined annual sales of more than one million units. That compares with about 339,000 vehicles for the two brands in 2023.
Under the deal, Zeekr will purchase a 30 per cent stake from another group firm, Volvo Cars, and a 20 per cent stake from Geely Holding, the group said in a statement.
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Shares in Volvo Cars were up 3.5 per cent in early trade, among the biggest gainers on the pan-European STOXX 600 index.
Zeekr will then nudge its stake up to 51 per cent with a capital injection while Geely Automobile Holdings, the group’s main listed arm, will continue to own the rest.
The deal values Lynk, a Chinese-Swedish brand, at around 18 billion yuan (S$3.3 billion). It should be completed by June next year, a person with direct knowledge of the plans said.
Details of the transaction were first reported by Reuters.
Within the group, Zeekr is expected to lead innovation for electric and connected vehicles, sharing that research with other brands including Lynk and Polestar, said the person and a another source with direct knowledge of the plans.
Lynk’s product team started to report to Zeekr CEO Andy An last week and there have been discussions about leveraging more technologies and components that the two automakers share, one of the people said.
Geely declined to comment on the information from sources.
Lynk’s two latest EV models, the Z10 and Z20, share the same architecture used by Zeekr’s cars while its petrol and hybrid models use different platforms developed by Geely and Volvo Cars.
Lynk, which was launched in 2016 and currently has nine models, sold roughly 195,600 vehicles in the first nine months of the year, a 40 per cent increase over the same period a year ago.
By comparison, Zeekr, a three-year-old brand, sold almost 143,000 cars during January to September with six models, up 81 per cent.
Zeekr listed in New York in May and has seen its shares climb almost 40 per cent since then, giving it a market value of US$7.3 billion. REUTERS
