The integration of Zeekr and Lynk & Co has been implemented. An Conghui: Each of the two brands has cut 20% of the planned vehicle models. | The Frontline

On February 14, Zeekr and Lynk & Co completed the equity transfer, and Zeekr Technology Group was officially established. After the completion, Zeekr holds a 51% stake in Lynk & Co, and Geely Automobile holds a 49% stake, making Lynk & Co a non-wholly-owned subsidiary of Zeekr.

Zeekr Technology Group held a media communication meeting. An Conghui, the president of Zeekr Technology Group, and several senior executives announced many details of the merger of Zeekr and Lynk & Co, as well as the goals and plans of Zeekr Technology Group for 2025.

After the organizational and reporting relationship of Lynk & Co was transferred to Zeekr Technology Group, a new management model was formed within the group. Currently, the two brands of Zeekr and Lynk & Co have initially formed an operating model of "independent front-end and highly shared middle and back-end".

At the brand and product level, In the future, the Zeekr brand will focus on medium and large-sized vehicles, targeting the market above 300,000 yuan, while Lynk & Co will mainly target the market above 200,000 yuan.

The specific vehicle models will be divided in the form of product lines, and the planning of modules such as product planning, project management, software and hardware integration, and functional integration will be the responsibility of each product line. At the product end, both Zeekr and Lynk & Co have formed a more flat management approach.

Currently, Zeekr has a total of 3 product lines, respectively positioned in the high-end market, the medium and large-sized mainstream market, and the future models for the B-end. Lynk & Co has two product lines, respectively positioned in small and medium-sized vehicles and medium and large-sized vehicles.

The group has established a Product Committee and a User Committee to uniformly manage the five product lines of the two brands. An Conghui revealed that the two brands will launch 5 new vehicles in 2025, which is the decision-making result after the overall management of the product lines. "I can clearly say that as of today, the number of products of each brand has been reduced by more than 20%."

In terms of R & D, the two originally separate intelligent teams have now been merged and managed. In the future, both the Zeekr and Lynk & Co brands will use the Zeekr Haohan Zhijia developed by Zeekr's independent R & D team. Lynk & Co 900 will be the first model to use Zeekr Haohan Zhijia, and Lynk & Co 900 will use Nvidia's latest Thor chip.

In terms of the intelligent cockpit, since Lynk & Co vehicles still have a certain sales volume overseas, the original Flyme cockpit system will be temporarily used. But An Conghui said, "In the future, (intelligent cockpit) we must achieve platformization."

Other than intelligence, the other R & D departments have also initially achieved collaborative development. At the end of last year, the integration of product R & D has helped both sides reduce the R & D cost by 15%.

In terms of the terminal channels and users, Zeekr and Lynk & Co operate independently, but the group has established a User Committee, and major decisions in the domestic and overseas markets will be collaboratively managed by the User Committee.

According to Lin Jie, the director of the User Committee, Zeekr's stores are concentrated in first- and second-tier cities, but it still has a considerable sales volume in the lower-tier markets. If the coverage is to be expanded by opening direct-sale stores, the cost will be high. Therefore, in the lower-tier markets, Zeekr will borrow Lynk & Co's channels and investor resources, and will also access Lynk & Co's after-sales system. "But the showrooms of the two brands will still be independent."

The integration of the middle and back-end system has brought new competitiveness in technology and cost for the two brands. In 2025, Zeekr and Lynk & Co have set new sales targets.

An Conghui said that the total sales target of Zeekr Technology Group in 2025 is 710,000 vehicles, including 390,000 for Lynk & Co and 320,000 for Zeekr. In 2024, the sales volume of Lynk & Co is 280,000 and that of Zeekr is 230,000, with a combined sales volume of 510,000. Judging from the target of a 40% growth, Zeekr Technology Group is confident in this business integration.

Moreover, the overseas market will account for 10% of the total sales volume, about 70,000 vehicles. Among them, Lynk & Co will account for 60% and continue to be the main force in the overseas market. Zeekr will also start a large-scale overseas expansion, expected to contribute 40% of the overseas sales volume.

Under the overseas expansion plan, Lynk & Co and Zeekr plan to open a total of 200 stores overseas by 2025. Lynk & Co 08 EMP and Zeekr 7X will be the main models for going overseas. An Conghui said, "Zeekr Technology Group not only exports complete vehicles but also realizes local production. It is currently actively promoting it, and the specific progress is not convenient to be announced yet."

In response to the financial situation after the merger of the two brands, An Conghui responded that multiple measures will be adopted to solve the problems.

The main reason for the loss of the Lynk & Co brand is the sales model in the European market. In the early stage of going overseas, Lynk & Co operated in the European market with a subscription model, which brought considerable challenges to the brand's profitability. However, in 2024, Lynk & Co has begun to convert the subscription model into a dealer model. In the future, Lynk & Co will also cooperate with Volvo in terms of users and dealers to alleviate the financial problems of Lynk & Co in Europe as soon as possible.

The loss of Zeekr is narrowing. In the first three quarters of 2024, Zeekr's total revenue was 18.36 billion yuan, and the net loss was 4.097 billion yuan. Among them, Zeekr's net loss in the third quarter was 1.139 billion yuan, a year-on-year decrease of 21.7% and a quarter-on-quarter decrease of 37%. And Zeekr's gross profit margin of the complete vehicle has reached 15%.

From the announcement of the merger to the official establishment of Zeekr Technology Group, Zeekr and Lynk & Co have quickly carried out organizational and process adjustments in three months. The effective results of this action have also initially emerged.

In 2025, Zeekr and Lynk & Co will launch a total of 5 new vehicles to the market. The unified management of the Product Committee has minimized the internal competition between the two brands; collaborative R & D has enabled the R & D costs of the two brands to be reduced by 15%; the cooperation of the dealer channels will further expand the coverage of the two brands.

As the business integration of the two brands further deepens, its cost advantages will continue to emerge. Under the intelligent war and price war, the importance of integration and cost reduction has been further verified on the Zeekr and Lynk & Co brands.

Of course, integration and focus will not stop here. Integration and efficiency improvement will become the phased goals of Zeekr Technology Group.