Avoiding internal friction, Geely will integrate the two major brands, Zeekr and Lynk & Co. | Exclusive from 36Kr.

"Further clarify the positioning of each brand, rationalize equity relationships, and reduce conflicts of interest and duplicate investments." In the "Taizhou Declaration" released by Geely Group, mergers and reorganizations have become the main theme of the group's adjustments.

Exclusive to 36Kr, Lynk & Co, a brand under Geely Group, will be merged into Zeekr, and will be managed by Zeekr CEO An Conghui. After the merger, the Lynk & Co brand will be retained, but the team and strategy will be integrated with Zeekr.

Among them, the finance and procurement teams will be the first to complete the merger, and the adjustments of the product, R & D and other departments will also be promoted from the end of this year to the beginning of next year.

Lynk & Co and Zeekr can be said to be the twin stars of Geely's passenger vehicle brands in recent years. In the first three quarters of this year, Lynk & Co sold 169,800 vehicles, and Zeekr's sales approached 150,000. The sales of the two brands accounted for nearly 30% of Geely Group's total sales. They are not only the sales pillars, but also important roles in Geely's new energy transformation.

Insiders revealed that the overlap of products between Lynk & Co and Zeekr is the reason that prompts the top management to make up their minds to integrate.

Lynk & Co, which opened the market with hybrids but failed in entering the pure electric field, and Zeekr, the pure electric pillar brand of Geely, eased its stance on hybrids. In the era of strong competition, such repetitive product positioning and investment will undoubtedly lead to vicious competition among sibling brands, and Geely has to "make a move".

Insiders told 36Kr that Lynk & Co is a joint venture between Geely and Volvo. The founding model, Lynk & Co 01, is a project led by Volvo, and Volvo, which holds a 30% stake, has a lot of decision-making power in Lynk & Co's business decisions.

However, when Geely acquired Volvo, it promised that it has independent business rights. Therefore, in the business development of Lynk & Co, Geely is somewhat limited. "To regain 100% business decision-making power of Lynk & Co, Geely must negotiate with Volvo". Judging from the results, the two sides have reached an agreement.

The predecessor of Zeekr is the Lynk & Co Electric Vehicle Business Group. In September 2021, it officially became an independent sub-brand under Geely Holding Group. This year, Zeekr's monthly sales exceeded 20,000 units, and it was successfully listed on the US stock market. Whether in terms of sales or brand development, Zeekr's achievements are more outstanding.

Having Zeekr CEO An Conghui lead the future development of the two brands will undoubtedly enhance Geely's competitive chips in the new energy vehicle market while improving the product strength and market competitiveness of the two brands.

Avoid Internal Competition, Lynk & Co and Zeekr Unite as One

Lynk & Co was established in 2017 and is a joint venture of Geely Holding Group, Geely Automobile and Volvo Cars. Lynk & Co's past products were mainly fuel and hybrid models. The EM-P Super Extended-Range Electric Solution launched in 2024 has led to a significant increase in Lynk & Co's sales.

From January to October this year, Lynk & Co's total sales exceeded 220,000 units, with a year-on-year growth of nearly 38%. The Lynk & Co 08 EM-P and Lynk & Co 07 EM-P, two hybrid models, have become the best-selling models.

When hybrid models were selling well, Lynk & Co suddenly entered the pure electric field. In September this year, Lynk & Co's first pure electric sedan, Z10, was launched. With a price range of 180,800 - 313,800 yuan, the total delivery volume in the two months after its launch was less than 5,000 units. Compared with hybrid models, Lynk & Co's pure electric model did not achieve the expected results.

Lynk & Co Z10 is built based on Geely's SEA Architecture. Under the same architecture, Geely's another sub-brand, Zeekr, has two models similar to Lynk & Co Z10: the B-class sedan 007 and the shooting brake 001.

The Zeekr 007, which has a higher price and smaller size than Lynk & Co Z10, has delivered more than 10,000 units in the two months after its launch. The Zeekr 001, which has a more similar design and positioning, once achieved a monthly sales of 14,300 units. It is the sales pillar of Zeekr and also the ace model of Geely Group in the pure electric track.

But Lynk & Co Z10 seems to be slightly struggling in terms of product strength.

As the brand's first pure electric new car, the three-electric system of Z10 is out of date compared with Zeekr: its gold brick battery is the same as the old Zeekr 007, and the rear-wheel drive motor is the same as the old Zeekr 001. The new products of sibling brands in the same period use the latest motors and batteries of Geely.

The gap in product strength makes Lynk & Co Z10 struggling. In this year's new car market, pure electric sedans are coming fiercely. Xiaomi SU's delivery volume exceeded 20,000 units in July, and XPeng MONA 03 delivered more than 10,000 units in its first full month.

The competition between Lynk & Co and Zeekr in the comfortable range has now intensified exponentially. "A large part of the pressure on Z10 actually comes from the sibling brand Zeekr," an insider said.

In July, Zeekr even eased its stance on extended-range vehicles, saying that it does not rule out the possibility of launching hybrid models in the future. For Lynk & Co, this is another strong sales competitor. In order to survive, Geely has to start to change this situation of internal competition.

Brand Merger and R & D Integration, Geely Focuses on Elite Operations

In the past ten years, Geely Group has been adhering to the development strategy of multiple brands and multiple channels, and has more than ten automotive brands under its umbrella. From Geely Automobile, Lynk & Co, Zeekr, Volvo to Lotus, these brands have different positioning and characteristics, almost completely covering the automotive consumer market from low-end to high-end.

The multi-brand and multi-channel strategy has brought high-quality growth to Geely. In the first half of 2024, Geely achieved a half-year revenue of over 100 billion yuan for the first time, and the gross profit margin reached 15%.

However, the competition in the Chinese automotive market is constantly intensifying. There are more than 100 new energy vehicles planned to be listed in 2024. While the product strength of new vehicles is continuously improving, the prices are also continuously decreasing. Only with good products and low prices can they continue to survive in the market.

However, behind Geely's multi-brand and multi-channel strategy, the decentralized R & D and supply chain efficiency mean duplicate investment of funds and vicious competition among sibling brands. Only by focusing can Geely improve its comprehensive strength.

36Kr previously reported that since August this year, Geely Group has begun a major adjustment of its R & D system. The objects involved in the integration include Geely Central Research Institute and the teams of intelligent driving, cockpit, electronic and electrical architecture, electric power, and vehicle platform behind each sub-brand, as well as the procurement and supply chain at the back end.

Subsequently, Geely released the "Taizhou Declaration", clarifying that it will further clarify the positioning of each brand, reduce conflicts of interest and duplicate investments, and improve the operational efficiency of the group.

Soon, the Geometry brand, which had poor sales, announced that it would be merged into the Galaxy brand to jointly focus on the mid-to-high-end market. This time, merging Lynk & Co into Zeekr is the second step of Geely's brand adjustment, concentrating resources to cope with the high-end new energy market.

Geely Group's transformation has gradually entered the deep water area, which is an inevitable choice for Geely's transformation and remodeling. The contraction and focus will not stop here, and "integration" will become the main theme of Geely Group in the future.