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Geely Wants To Merge Zeekr And Lynk&Co By Purchasing 51% Of Its Capital
Geely wants to restructure part of its business to reduce costs. One of its brands, Zeekr, is expected to buy its cousin, Lynk&Co, by taking 51% of its capital.
The Chinese automobile market may be the largest in the world in terms of volumes in 2024, but it is not an Eldorado for everyone. Even if Chinese manufacturers are gradually establishing themselves on their soil to the detriment of European, American, Japanese or Korean manufacturers, competition is increasingly fierce between them, and the damage is being felt. While one manufacturer recently announced that it was close to sinking (Neta), another is wondering whether it should not reduce costs and sails to effectively fight against the master of the Chinese market, namely BYD. And this manufacturer, or rather this group, is none other than Geely, which has multiplied alliances, acquisitions and investments in recent years. With its meteoric rise in the capital of Mercedes, association with Renault, acquisition of Volvo, Lotus and Proton and launch of Zeekr and Lynk&Co, the company’s progress has perhaps been too rapid given its potential in China.
Geely brings together Zeekr and Lynk&Co
The information was reportedly made official by the Economic Times media outlet, run by the Chinese government: Volvo Cars and Geely are selling their shares in Lynk&Co to Zeekr, which would thus take 51% of the capital and thus become the sole master on board. The management of Lynk&Co would thus report to the bosses of Zeekr, who will manage two brands. But it is not impossible to see Lynk&Co completely swallowed up by Zeekr which, let us recall, remains a subsidiary of Geely. A joyous mess! And to make things even more complicated, Geely would take advantage of the sale of Lynk&Co’s shares to reinvest… in Zeekr. Geely is betting big on the Chinese brand, which is launching in Europe with the 001 and the X.
It must be said that Zeekr is the rising star at Geely, while Lynk&Co has never really taken off since its launch in 2017, following the creation of a joint venture between Volvo and Geely. Here again, the case is complex and the ramifications are numerous. For the moment, there is no question of stifling Lynk&Co, but it is difficult to imagine the future for the young brand. According to the Chinese press, the idea would be to reduce “internal competition” at Geely, to better fight against BYD, the world leader in electric and plug-in hybrid vehicles. This should therefore reduce, a little, the complexity of the Chinese automobile industry, with alliances, subsidiaries and frequent divestitures.
