China may be poised to build its first car in Western Europe, with the help of Sweden’s Volvo Car Group.
The iconic brand that was taken over by Chinese billionaire Li Shufu, would offer its factory in Gent, Belgium, to build an upscale brand for the tycoon, the Swedish company’s Chief Executive Officer Hakan Samuelsson said. The Swedish carmaker may also extend its Europe infrastructure – service and other logistics – to the brand.
Li’s Zhejiang Geely Holding Group Co. started selling its upmarket compact SUV in China about two months ago under the Lynk & Co brand for a base price of 158,800 yuan (USD25,000). Volvo Cars could consider offering the factory to build the model if and when the Chinese company wants to expand to Europe, Samuelsson said in an interview in Hong Kong.
A ‘‘Made in Europe’’ stamp will augur well for the ambitions of a Chinese brand as it takes on global car majors such as Volkswagen AG, which has dominated the China car market for a decade. After years of selling lower- priced models at home, Chinese carmakers such as Geely and BYD Co. – which signed Leonardo DiCaprio as a brand ambassador – are increasingly turning their attention to the international market.
“If and when they decide to go global, to Europe, possibly the U.S., we can of course make that entry more credible,” Samuelsson said.
Li bought Volvo Cars from Ford Motor Co. in 2010 and spent more than $11 billion to modernize its production facilities. Last year, Geely bought almost 50 percent of Malaysia’s Proton Holdings Bhd. and 51 percent of British sports-car maker Lotus Cars. Li has ambitions of making Geely into a global major and as part of that plan, he unveiled the Lynk & Co in 2016, a brand that targets young customers.
The $25,000 Lynk & Co brand compares with the more popular $14,000 Haval H6 from Great Wall Motor Co., China’s biggest SUV maker. Great Wall is also seeking to move upscale with its Wey brand, which sold 86,427 units in 2017.
Volvo Cars owns 30 percent of Lynk & Co, while Geely Automobile Holdings Ltd. holds 50 percent. The rest is with Zhejiang Haoqing Automobile Manufacturing Co., a firm controlled by Zhejiang Geely. Lynk & Co shares the production line with the Volvo XC40 in a factory in China’s Luqiao, 350 kilometers south of Shanghai.
“We would of course have interest doing that,” Samuelsson said, referring to the support Volvo Cars is offering Geely. The Chinese carmaker is studying the feasibility of making the cars in Europe, a Geely spokesman said.
Volvo Cars’ volume sales in China last year rose about 25 percent to 114,410 units, and the automaker’s biggest market will “continue to grow fast” in 2018, Samuelsson said, without elaborating. MDT/Bloomberg
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