If Any Chinese Car Company Will Take On The World, It's This One
Bertel Schmitt ,
CONTRIBUTOR
I have written about the auto industry all my life.
Opinions expressed by Forbes Contributors are their own.
Bertel Schmitt - Control room of Geely's engine test center in Hangzhou, China
When will Chinese carmakers follow the Japanese, and Korean example, and take over the world? If it happens, who will it be? Sitting at a desk overlooking a glitzy Shanghai skyline that can put Manhattan, or downtown Tokyo to shame, I predict that scrappy Geely will be at the vanguard of Chinese automakers to take on the world. I write this after having seen Geely’s R&D center in Hangzhou, after having talked to its production engineers in Geely’s hometown some three hours south of Shanghai, and after having been granted a rare glimpse behind the closed doors of the company’s design studios in Shanghai. I am rarely impressed, but I am.
“The Chinese car industry is ready to enter a new phase, and to break out of its home market,” Geely’s marketing chief, Alain Visser, told me in Shanghai. “I am confident that we will be first, but I would be very surprised if we are the only ones.”
Bertel Schmitt - Geely Group CMO Alain Visser introduces Lynk&Co brand to China
Visser was marketing chief of Ford and GM in Europe before he signed up at Volvo. Geely bought
Volvo in 2010 for a bargain-basement $1.5 billion from a cash-strapped Ford, when the Detroit automaker fought for post-carmageddon survival. It was one of those rare deals that worked all around. Ford came through alive, if not entirely unscathed (it also sold Jaguar Land Rover to India’s Tata, Aston Martin to private investors, and its controlling share in Mazda to Japanese banks.) Volvo was not dismantled and shipped-off to China, as many predicted. Volvo engineers were given free rein to develop technology, and they became early leaders in autonomous tech. Geely finally had a leg up on the competition. Eventually, it also had Visser as CMO of the whole group.
The deal was especially good for Geely. Before the Volvo takeover, it made 330,000 cars a year, approximately the same number as the near-dead Volvo. Last year in 2016, Geely group sold some 1.3 million units globally, spokespeople told me in Hangzhou, where the company is headquartered. 766,000 of the cars were sold by Geely, mostly in China, with a few going to South America, Africa, and elsewhere. Volvo sold around 534,000 units globally in 2016, I was told. That volume was created, Tesla-watchers take note, with “about 20 different models,” said Geely spokesman Sumi Yang after performing a quick mental count, and after explaining that “the number changes quickly.” This year, Geely wants to sell between 1 and 1.2 million units, and it wants to reach 2 million by 2020. Volvo wants to sell another 800,000 units by 2020,
Volvo boss Hakan Samuelson told The Economist. That 2.8 million target does not appear far-fetched at all. Group-wide, Geely already operates 12 factories, 9 in China, and one each in Sweden, Belgium, and England. Tesla wants to produce one million cars by 2020 in one factory in Freemont, California. Compare that to Geely, and you are beginning to have doubts. With Tesla.
For this year, Geely alone plans the launch of nine new models. I was shown all of them, and a few of next year, modeled in clay, after I surrendered my smartphone and signed a quite toothless NDA to gain access to Geely’s design studio, housed in a former World Expo building on the Pudong side of Shanghai.
Geely’s team of 500 designers, spread over studios in Pasadena, CA, Barcelona, Spain, Gothenburg, Sweden, and Shanghai, won’t run out of work anytime soon. “The Chinese market develops so quickly that we launch a new facelift each year, and a completely new car every three,” told me Geely’s Shanghai studio chief Guy Burgoyne, a bearded Aussie who designed Holden cars before signing up with Geely in 2013. At his Shanghai Studio, some 40 projects are cooking in various stages of completion.
Geely’s far-flung design operation is run by Peter Horbury, a flamboyant and outspoken Brit who endeared himself to the British media with his eminent quotability. After a few glasses at the Shanghai studio, he regaled us with war stories, like when he stated at his arrival at Volvo in 1991 that “designers are not there to make the work of engineers look prettier. Engineers are there to make our designs work.” His favorite line is that the obscenely expensive stamping tools needed to make a car, “cost the same, whether the product looks ugly, or nice.”
At Geely, the 3D data in the CAD computers are turned into real parts by CNC machines eating trough blocks of plastic at frightening speed. The parts are assembled into verification models, and subjected to the critical eyes of the designer. If a subtle detail won’t pass scrutiny, a dot sticker sends the part back to the designer’s CAD computer. Only when a car is dotless, the design is deemed fit to be unleashed on the production line, and finally, the populace. “Chinese cars were rightfully criticized in the past for their lack of finesse,” said Horbury, and he is making sure that this no longer applies to Geely. Geely is well on its way to an up-positioned brand that caters to what its marketers call a “newfound nationalism among younger Chinese car-buyers,” who want something else than their father’s Volkswagen, or Buick.
Geely has come a very long way in a very short time since it flooded the Chinese market some 15 years ago with dowdy conveyances based on technology that harkened back to a disco-era Daihatsu Charade. Geely cars now have a common, and quite pleasing design language. The underpinning technology also is a far cry from the old hand-me-down platforms that were shipped to China by global OEMs by the time the tools were already worn-out.
Bertel Schmitt - Shanghai design chief Guy Burgoyne introduces new Geely MPV at the Shanghai Auto Show
The Chinese joint venture model requires that a foreign automaker can hold not more than 50% of the shares in a Chinese operation. A Chinese automaker must own the other half of the joint venture. This is frequently decried as a ticket to steal foreign technology. Over the years, just the opposite emerged. Large Chinese automakers see no need to invest heavily into R&D, it comes in a FEDEX envelope, or via high-speed data line from Detroit, Wolfsburg, or Tokyo. The Chinese joint venture model made fat and lazy. Innovation is only learned by actively innovating, and by taking part in the innovation process. As owner of world-class automaker Volvo, Geely engineers can be 5 years ahead of their colleagues at mostly state-owned joint ventures.
. This is not inspiration this is copy-paste
