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Shedding its skin

  • Source: Global Times
  • [08:28 December 31 2010]
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An employee works on a vehicle in a production base of Geely in Ningbo, Zhejiang Province. Photo: CFP

By Chen Xiaomin

The last three years for automaker Zhejiang Geely Holding Group Co have had their share of commercial ups and downs.

From the bumpy road that led to the purchase of Volvo Cars to the ongoing battle to shed its image as a poor-quality carmaker, top brass at the Hangzhou-based company are overhauling their business strategy.

Along with its car-producing technology improving, Geely's purchase of Volvo Cars from Ford has also won it much popularity across the world, although doubts on whether the late-comer has the ability to run Volvo Cars can be heard even now.

Heading for the fourth year of its "strategic transformation," Zhejiang Geely Holding Group Co, owner of Swedish automaker Volvo Cars, began to think about what they should do next to turn Geely into an influential brand or even a competitive global brand.

Fierce competition ahead

The indigenous automaker invited more than 100 reporters, industry observers and scholars to a seminar, briefing them on Geely's strategic transformation results over the last three years and asking for suggestions on its future development.

The seminar was held on December 20, the Media Day of the nation's second largest auto gala.

"Geely has acquired the ability to innovate independently after years of copying and integrating. But the automaker, together with other indigenous car producers such as BYD Co and Chery Automobile Co, is like a middle school student compared with its well-established rivals," said Zhang Xiaoyu, director of China Machinery Industry Federation (CMIF), at the seminar.

Zhang said what concerned him was where Geely will be in the next 10 years. "When China upgrades from the present major auto country to a powerful auto country, what role will Geely be playing? Will Geely still be one of the nation's top 10 automakers in 2020? "

Besides competition from overseas automakers, Geely also has to be wary of com-petition from joint ventures, which have been selling more and more vehicles developed in house, which can have advantages in both performance and price, said Zhang.

Transformation kicks off

"Having realized low prices cannot sustain a company for long, Geely kicked off its transformation in 2007, when its annual sales growth rate plunged to eight percent from 600 percent in 2000 - the fourth year it had made vehicles," said Yang Xueliang, spokesman for Geely.

The transformation, as Yang put it, is intended to help Geely get rid of the cheapie image and become a technology-driven automaker that is able to produce the safest and the greenest vehicles.

Geely seeks to finish its transformation in nine years - from 2007 to 2015, when its capacity is scheduled to reach 2 million vehicles, half of which will be exported overseas. The automaker aims to develop more than 40 models as of 2015.

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