Satellites, driving services and flying cars – How China’s largest private car manufacturer is becoming a global player

Shanghai Attracting attention in China is not easy. When companies present their ideas, Chinese media representatives and influencers expect a spectacle. The car manufacturer Lynk & Co has therefore set up a small city backdrop in Shanghai to showcase the new “09” model. The presentation includes a light show and dancing women with huge horse masks in the audience.

Lynk & Co, started five years ago in Berlin, is one of the youngest companies in the realm of Li Shufu, the founder of Geely. In just a few decades, the 58-year-old Geely went from being a refrigerator manufacturer to what is now China’s largest private car manufacturer. His Geely Holding Group now includes Volvo, which only went public on Friday, and Polestar, both headquartered in Sweden, as well as the British sports car brand Lotus and, since 2018, almost ten percent of the German automaker Daimler.

Li Shufu has international ambitions. Geely has the “overarching mission,” said Li, “to become a global mobility technology company,” as he writes in an employee letter.

“If you asked Li Shufu how we position ourselves, he would say ‘the wild horse in the stable'”, says Alain Visser, CEO of Lynk & Co, in an interview with Handelsblatt.

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Lynk is an experiment on how mobility can develop. “For us, it’s not about selling cars, but rather selling mobility contracts,” says Visser. For 500 euros per month, customers can subscribe to the 01 model, a compact SUV. The car is then at their own disposal. Repairs, insurance, maintenance – Lynk takes care of all of this. If you take out a subscription, you become a member of a club at the same time and can also rent the car to others.

Ambitious growth plans

The company currently has 460,000 members worldwide, including 29,000 in Europe. According to Lynk’s definition, those 29,000 customers have already received or are waiting to get a car. However, it is also possible to become part of the club without registering for a monthly membership.

The number of members is expected to grow to around 150,000 by the end of 2023. “The way things are developing is also very realistic,” says Visser. “We hope that we will be profitable within two years.” He sees not just the car brands as the main competitor, but basically all mobility providers.

Alain Visser

“If you asked Li Shufu how we position ourselves, he would say ‘the wild horse in the stable'”, says Alain Visser, CEO of Lynk & Co, in an interview with Handelsblatt.

(Photo: Bloomberg)

In itself, according to experts, Lynk’s subscription model is not revolutionary. “The monthly subscription offer from Lynk has no outstanding unique selling point,” says Jan Burgard from the management consultancy Berylls. There are more than 40 different providers of subscription models in Europe. “We see the ‘subscription as an entry’ model as a good plan for Chinese car manufacturers because customers are still relatively reluctant to buy Chinese vehicles.”

The monthly cancelable subscription makes the step to a new brand much easier, says Lynk CEO Visser. “I think China will soon be seen as the land of technology,” he says. “‘Made in Germany’ will soon be ‘Made in China’.”

The main focus of the Geely and Lynk brands in selling cars has so far been on the Chinese market. The companies export less than ten percent of their vehicles to countries outside of China.

Mobility and communication are growing together

But Geely founder Li Shufu still has big plans. By 2025 he wants to sell 3.65 million cars a year under the brands Geely, Lynk & Co and the electric cars of the brands Zeekr and Geometry. In the first six months of the year, Geely and Lynk together sold 630,237 vehicles.

Geely is active in numerous other areas besides the car business. “If you look at Geely’s investments, the company is broad, but future-proof,” says management consultant Burgard. On the one hand, Geely goes into traditional business models, such as the stake in Daimler. The company is also venturing into new areas, for example with the Caocao mobility platform, and can thus try out technological innovations.

In late September, Geely’s subsidiary Geely Technology Group announced that it had started mass production of satellites. Geely’s entry into the commercial satellite business is part of the group’s transformation into a global mobility technology company, the company said in a statement. In the same month, Geely also announced that a newly founded subsidiary called Xingji Shidai should bring a premium smartphone to the market by 2023. The goals are ambitious: it should sell three million devices in the first year.

“I think the company’s overall goal is to make sure it is relevant both on the ground and in the air in the new age of mobility,” said Edison Yu, an analyst for China’s mobility industry at Deutsche Bank in New York. Geely is ready to use all kinds of relationships – joint venture, equity participation, acquisition – to make this vision a reality.

Politically, the environment for Chinese entrepreneurs has not gotten any easier, both in China and abroad. Recently, the Chinese government has focused more on the extremely unequal distribution of income and wealth in the country. The country’s numerous billionaires are also targeted. Li Shufu’s net worth is currently estimated by Forbes at 23.7 billion US dollars.

More: Renault is pushing back to China – and making the start difficult for Opel

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