Taking over SAIC-GM's old factory is just the beginning. Is Geely planning for an annual production capacity of 5 million vehicles?

Recently, there were reports that Geely Auto has taken over the former SAIC-GM Beisheng Plant (Phase III) in Shenyang. Currently, the plant is undergoing upgrading and renovation, and it will be used to supplement the production capacity of Geely Galaxy in the future.

This new energy brand, which has the opportunity to catch up with BYD and achieved its annual sales target of one million vehicles two months ahead of schedule in October this year, Geely Galaxy is currently facing the sweet trouble of "production capacity struggling to keep up with orders".

The author also confirmed this news from the recruitment information of Geely Auto's Shenyang plant. The information shows that the base covers an area of 2.22 square kilometers. The models planned to be put into production are all at the forefront of sales in their respective segments. The goal is to transform it into a vehicle production base and a 4.0 factory with advanced technology and a high degree of intelligence. It is planned that the first vehicle will roll off the production line by the end of this year.

In addition, to improve the production capacity supply of Geely Galaxy, Geely also plans to renovate the Lotus sports car factory in Wuhan. The project was signed in September this year and is expected to be implemented in the first half of 2026.

According to statistics from "Auto Commune", currently Geely Auto mainly has 16 major bases across the country, with a relatively concentrated presence in Zhejiang. There are also base layouts in Hunan, Guiyang, Sichuan, Xi'an, Hebei, Shanxi, Shandong and other places. The actual planned production capacity exceeds 4.5 million vehicles.

If we also consider Geely's current plan to expand production capacity through "leasing + renovation" and the layout of overseas factories, Geely Auto's total annual production capacity planning will exceed 5 million vehicles, clearly aiming for the goal of becoming the largest automaker in China.

According to Geely's internal statement that "next year will be a big year for products", combined with its production capacity planning and layout, when do you think Geely will truly become the largest automaker in China?

01

New cars are popular. Is Geely "borrowing" production capacity?

Actually, before the official disclosure of the news that Geely took over the GM Beisheng Plant, there were signs of this event. In February 2025, the SAIC-GM Beisheng Plant was completely shut down. Later, it was reported that the industrial land of the southern factory would be converted for commercial and residential development, while the northern factory (i.e., Phase III) was retained.

As one of the old industrial bases in Northeast China, Shenyang was also an important automotive city in the past. Automobile companies and bases such as Brilliance, BMW, Jinbei, and GM supported the local industrial foundation and formed an automotive industry cluster. However, with the decline of enterprises such as Brilliance, Jinbei, and GM, and BMW being eroded in the luxury car market by Chinese new energy vehicles, Shenyang also needs to introduce powerful automobile enterprises to support its development.

In May this year, Shenyang Jichi Automobile was established. Although all the capital behind it is from Shenyang state-owned assets, the word "Ji" in its name has an obvious implication. At that time, it was reported that the company would invest 890 million yuan to renovate and upgrade the base. Almost at the same time, there were rumors in Shenyang that Geely would take over the Beisheng Plant.

Later, recruitment websites showed that "Geely Auto's Shenyang Base" was intensively recruiting positions such as welding engineers and new energy production line technicians, with a preference for those "familiar with the renovation of electric vehicle production lines". This demand for talent structure and positions implies that this traditional fuel vehicle factory will be transformed into a dedicated new energy base.

In September this year, Geely's Shenyang project was officially finalized, and then the recruitment of production line employees began one after another. In October, the factory started comprehensive renovation and upgrading. This joint-venture base that once had an annual production capacity of 500,000 vehicles has officially entered a new era for Chinese brands.

The core reason why Geely is so eager to "borrow" production capacity everywhere is that a series of its latest new cars, from Geely Galaxy to Lynk & Co and Zeekr, have far exceeded expectations.

"Although the current daily production schedule is about 700 vehicles, the production capacity is seriously insufficient. Currently, only about 10,000 vehicles of production capacity are allocated to the Galaxy M9, and there are still about 20,000 orders outstanding. Moreover, the number of new orders each month is now about 20,000." At the ceremony for the offline of 20,000 new Geely Galaxy M9 vehicles on October 31st, the relevant person in charge of Geely's Qiantang Base, which produces the Galaxy Xingyao 8 and M9, said that both the Galaxy Xingyao 8 and the Galaxy M9 are selling well, and there are many vehicles owed to users.

There are also large flagship SUVs such as the Lynk & Co 900 and the Zeekr 9X. The production capacity of each model cannot meet the market's order demand. According to insiders from Lynk & Co and Zeekr, the production capacity of the Lynk & Co 900 is only about 7,000, and it is currently operating at full capacity; the initial production capacity of the Zeekr 9X is only about 5,000 vehicles. However, since its launch, the number of orders has far exceeded Zeekr's expectations. Now, if you place an order, you have to wait at least half a year to pick up the car.

According to the data released by Geely in October, Geely Galaxy achieved its annual sales target of one million vehicles two months ahead of schedule. Among the 11 models of Geely Galaxy on sale, 7 models have entered the "10,000-vehicle club", even under the condition of tight production capacity. This shows the market recognition and popularity of the Geely Galaxy brand.

"There is a serious shortage of vehicles, and the production capacity is severely insufficient..." The author learned from insiders of several Geely vehicle models that actually, it's not just these large vehicles that have insufficient production capacity. Models such as the Geely Xingyuan, Galaxy A7, and Galaxy Xingyao 6 are all popular models.

However, the question is, does Geely really lack production capacity? According to the preliminary statistics and verification by "Auto Commune", currently Geely has 16 major bases, with a planned annual production capacity of over 4.5 million vehicles. But this year, Geely Auto is expected to achieve annual sales of 3 million vehicles, which means it still has about 1.5 million vehicles of surplus production capacity that has not been fully utilized. Even if Geely aims for sales of 4 million vehicles in its plan for next year, the current production capacity is completely sufficient.

Therefore, whether Geely acquires the SAIC-GM Beisheng Plant in Shenyang or takes over the Lotus Factory in Wuhan, its core purpose is not only to expand production capacity but also to adjust the layout of production capacity, the market, and the industry.

Looking at the production capacity layout map of Geely's bases, its headquarters is in Zhejiang, where 8 major bases are currently located, mainly covering the East and South China markets. From the radiation scope of the national bases, the northernmost bases in Zhangjiakou, Jinzhong in Shanxi, and Jinan in Shandong can cover the northern market; Chengdu and Guiyang can cover the Southwest market, Xi'an and Baoji can cover the Northwest market, and currently, the Xiangtan Base in Hunan covers the central market.

However, with the increasing demand for new energy and the gradual growth of penetration rate, there have been some imbalanced factors in Geely's new energy layout. Especially in the western, northern, and central regions, there is a contradiction between the explosive sales and the production capacity gap. Moreover, if products are transported to the market from more distant bases over long distances, it will also increase logistics and management costs. In this era when profits are gradually being squeezed, the closer the base is to the market, the more beneficial it is for the enterprise.

Therefore, from the market perspective, the potential for new energy penetration in the Northeast market is a key attraction. Data from the China Association of Automobile Manufacturers shows that in the first half of 2025, the penetration rate of new energy vehicles in the Northeast region was only 18.2%, far lower than the national average of 35%. By laying out a base in Shenyang, Geely can not only reduce logistics costs through "local manufacturing" but also promote its hybrid models suitable for cold regions with the help of geographical advantages. Currently, in this region, new energy vehicles are mainly dominated by BYD.

So, when we recall that in January this year, Geely Holding Group (including Geely Auto, Volvo, and Farizon Commercial Vehicles, etc.) announced that it aims to achieve annual vehicle sales of 5 million by 2027, its external statement seems a bit conservative.

02

Production capacity is a double-edged sword

The rise and fall of the SAIC-GM Beisheng Plant can be regarded as a microcosm of the changes in the joint-venture model of China's automotive industry. The "golden decade" of the joint-venture era has officially come to an end, and a new chapter of the self-owned brand leapfrog development is being opened.

This joint-venture base, which was established in Shenyang in 2004, had a peak annual production capacity of 500,000 vehicles and 450,000 engines. Models such as the Buick GL8 and Chevrolet Equinox produced here once dominated the Northeast market for a long time. However, as SAIC-GM's sales continued to decline from the peak of 2 million vehicles in 2017 to 435,000 vehicles in 2024, its production capacity utilization rate was only 22%, and the shutdown of the Beisheng Plant became inevitable.

When GM transferred its Northeast base to Geely, it actually acknowledged the leading position of Chinese brands in the fields of new energy and intelligence.

Data from the China Association of Automobile Manufacturers shows that the market share of joint-venture brands has dropped from 60% in 2020 to 31.3% in 2025, while the share of self-owned brands is approaching 70%. At the same time, the market share of self-owned brands in the new energy market exceeds 60%, while that of joint-venture brands is less than 10%. The withdrawal of production capacity by giants such as GM and Volkswagen has provided an opportunity for leading self-owned brands such as Geely and BYD to expand. This change is not only happening in Shenyang but will also occur across the country in the future. Against the background of the country's strict control over new production capacity, acquiring old factories has become the optimal solution for leading enterprises to "expand production indirectly".

Actually, in June this year, Li Shufu, the chairman of Geely Holding Group, said at the 2025 China Automobile Chongqing Forum that there is a "serious overcapacity" in the global automotive industry today. Therefore, Geely has decided not to build new automobile production factories or expand the production capacity of existing factories, and will carry out practical cooperation and resource restructuring to the greatest extent possible.

Therefore, through acquisitions (such as the Shenyang Beisheng and Wuhan Lotus sports car factories) and renovations of existing bases (such as the Hangzhou Bay and Chengdu factories), Geely can achieve production capacity upgrades. This model not only avoids the approval threshold for building new factories but also enables it to quickly obtain mature production lines and ready-made supply chain resources, laying a foundation for its production and sales goals.

It is worth mentioning that these bases, local governments, and investors in difficult situations are eager to have a new backer to solve problems such as tax revenue, employment, and development. Geely's entry at a "low price" also shows Geely's keen business sense and insight as a Zhejiang entrepreneur.

Take the current Beisheng Plant in Shenyang as an example. Apart from having its component system's Ditong Industrial Holding Group settle in the Huishan Economic Development Zone in Shenyang, Geely has not yet established an obvious commercial organization related to passenger car manufacturing in the local area. According to industry analysis, the initial renovation funds for the base are provided by the local state-owned assets supervision and administration commission. It is not ruled out that in the future, Geely and the local government may share industrial benefits and share market risks.

After all, the expansion of production capacity is not a one-time deal. Just because Geely's new cars are currently popular does not mean they will continue to sell well in the next one or two years. The market is ever-changing, and competitors are emerging. Countless past stories tell us that victory can make people crazy. Once on the path of production capacity expansion, a company has to bear the risk of market changes and business decline. The cases of many joint-venture automakers in the past, from glorious expansion to decline and selling their factories, also tell us that expanding production capacity is a double-edged sword.

Therefore, the key to production capacity expansion lies in "precision" and "flexibility". It is necessary to match the market growth rhythm and have the flexibility to adjust quickly. Success or failure depends on the enterprise's judgment of the market cycle, its own strength, and its in - depth insight into the future market pattern. Having suffered a setback on the expansion path before, will Geely be able to successfully achieve its annual sales target of 5 million vehicles this time?

This article is from the WeChat public account "Auto Commune" (ID: iAUTO2010), author: Du Yuxin, editor