Geely gets in high gear

• Source: Global Times
• [08:19 January 20 2010]
• Comments

Jia said the Lanzhou-Xinjiang Railway, National Highways 312 and 109, Provincial Highway 201 and several other highways all run through Yongdeng County where the base is located. The county also has an airport and lies in the middle of Eurasia Land Bridge.

An Conghui, general manager of Geely Automobile, told a group of reporters on the sidelines of a press conference held in Lanzhou Friday that many plants would raise their capacities this year because they can't meet the market demand.

Besides the Lanzhou plant, Geely Automobile also makes vehicles and power assemblies in the prefecture level city of Linhai, Zhejiang Province; Ningbo and Luqiao in Zhejiang Province; Shanghai; Xiangtan, Hunan Province; Jinan, Shandong Province and Chengdu, Sichuan Province.

The company didn't elaborate further its expansion plans, and didn't reply an inquiry sent by the Global Times.

Zeng Zhiling, an auto analyst with Shanghai-based Global Insight, told the Global Times that the Lanzhou base will benefit Geely Group in the long run with local government's support and the rising west China auto market.

He added that Geely Group would produce more low-end vehicles in Lanzhou, and focus on medium and high-end vehicles in its eastern plants.

Business beyond China

An said that Geely Automobile will unveil other overseas plants quite soon and currently has plants in Russia, Ukraine, Indonesia and Malaysia.

Geely lowered its export targets up to 2015 from two-thirds to half of its products, though its other goals are unchanged – to produce and sell 2 million vehicles, and set up more than 13 overseas production bases as of 2015.

Built in 1997, Geely Group expressed an interest in overseas markets and began exports in 2004.

It sold 5,000 vehicles overseas in 2004 and 6,000 in 2005.

The number jumped to 37,940 units in 2008, but plummeted to 19,000 last year due to the global financial crisis.

Geely Group got a stake in Manganese Bronze Holdings in 2006, which makes London's iconic black cabs, and it acquired the world's second largest automatic transmission producer Australian Drivetrain Systems International for A$70 million ($55.83 million) last June.

In 2003 it disclosed its interest in Volvo, and announced on December 23, 2009 that it had settled all substantive commercial terms with Ford Motor Company relating to the proposed acquisition of the Gothenburg-based Volvo Car Corporation.

Geely Group is expecting a definitive stock purchase agreement in the first quarter of 2010 and to complete the Volvo buy in the second quarter of this year.

Analyst Zeng said the potential purchase of Volvo serves as a catalyst for Geely Group's expansion both at home and abroad.