After a short New Year break, the China mainland stock market opened on February 18, while the Hong Kong stock market opened earlier on February 14. Stimulated by the high sales volume in January, several homegrown automakers which were listed in the Hong Kong Exchanges gained an outstanding stock performance, with the high price breaking the past records. According to statistics, the share price of both Geely and Brilliance set a new record in the companies' history.
As one of China's representative independent automakers, Geely has reached a record high of more than 60,000 units in January. News comes that Geely will officially sell its cars in Belarus this month, increasing its share price by 7.7 percent on February 15.
After a few years' hard work, Geely has made great strides in the fields of brand building, high-tech research and development, new vehicle development and auto export. In 2012, Geely have totally sold 491,400 cars, ranking the tenth of China's top ten auto makers. Meanwhile, the company's sales volume increased at a high rate last year, much higher than the average rate in the auto industry.
Entering the new year, Geely's has set a new record with its high sales volume in January, which clearly shows that the company has almost finished its strategy adjustment and entered into a new period of fast growth.
Cars under three sub-brands all sold well
During the New Year holiday, Geely announced its sales volume in the first month of 2013. The sales volume reached 63,532 units in January, up 67 percent year-on-year and 7 percent month-on-month, among which more than 8,400 units were exported.
Of all those cars sold in January, the Gleagle, Emgrand and Englon topped the list, selling 22,482 units, 20,318 units and 20,732 units respectively, among which the Gleagle GX7 reached a record high of 7,306 units.
This is the first time for Geely that the sales of these three brands all exceeded 20,000 units on a monthly basis, showing the great success of the company's multiple-brand strategy.
Few years ago, Geely started from selling the budget cars. Relying on its lower prices, Geely rapidly became popular in the domestic auto market and grabbed certain market shares. However, lower prices also gave people an impression that Geely produced low-end cars. In order to change this impression, the company began to carry out the multiple-brand strategy, creating three sub-brands of the Gleagle, the Emgrand and the Englon.
The past few years have witnessed the great success of this brand strategy. The Gleagle SUV, the Emgrand EC8 and the Englon TX4 are all very familiar to the consumers in the domestic market, which greatly improved Geely's brand value.
Strive for high quality and advanced technology
In recent years, Geely has invested much in the field of independent research and development as well as innovation. With the successful introduction of a series of advanced technologies such as the self-developed car safety technology, the Blow-out Monitoring and Control System (BMCS), environment-friendly and energy-saving engines and the TSI 6-speed manumatic transmissions, Geely is transforming itself from a low-end, low price and imitative automaker to a high-tech innovator and reliable producer.
Take the Gleagle GX7 for an example, designed by Giorgetto Giugiaro, one of the best auto designers in the 20th century, and together with the Geely Automotive Research Institute, this SUV is customized for the Chinese consumers. It incorporates both the Eastern and Western aesthetic tastes as well as combines the urban fashion and cross-country experience. The GX7 is equipped with environment-friendly and energy-efficient engine with a displacement of 1.8L, 2.0L or 2.4L, and the DSI 6-speed manumatic transmission. As for the safety, the GX7 is available with active safety devices, such as visual reversing radar, the latest Anti-lock Braking System (ABS) and Electric Brakeforce Distribution (EBD), seven airbags, safety seats which are designed to prevent neck whiplash injury, three-point safety belts, and alarm configuration to warn drivers of neglecting the safety belt or over-speeding. Meanwhile, it is enhanced by some edge-cutting devices such as the intelligent trip computer, altitude-display instrumental panel, GPS navigation and multifunctional steering wheel which make the GX7 a world-class SUV.
It is its golden-quality products that lead to the Geely's excellent market performance.
Adapting new technologies through overseas mergers and acquisitions
In recent years, Geely gains a lot through cross-border mergers and acquisitions. As an outstanding Chinese indigenous brand, Geely acquired not only Volvo, the world famous luxury car brand, but also DSI, an Australian drivetrain system producer the world's second largest independent automatic transmission manufacturer.
Li Shufu, the Chairman of Geely Group believes that overseas mergers and acquisitions is not just for the operation of the capital market, and the most important thing is to import the advanced technologies into China to narrow the gap between China's auto industry and the advanced world standard as soon as possible.
Geely has been trying to introduce DSI's core technologies on automatic transmission into China since DSI was taken over. After two years of hard work, Henan Jisheng International Power Transmission System Co., Ltd., covering an area of more than two hectares and attracting a total investment of 500 million RMB, went into operation in Geely manufacturing base settled in Xiangtan, Hunan Province. The company has produced the first 6-speed manumatic transmission, filling the gap that the homegrown brands have in the field of high-grade automatic transmissions.
In December, 2012, the domestic automaker started a test driving program for models with 6-speed automatic transmissions (6ATs) in Shenzhen and launched four new models, the Gleagle GX7/GC7, the Emgrand EC8 and the Englon SC7. These DSI 6AT-equipped models show Geely's great achievements in the research and development of core components and the upgrading of technology system, at the same time, it also breaks the monopoly of foreign companies in high-end automatic transmission production and quickens the popularity of self-developed technologies on a large scale. Because of the larger needs for the automatic transmission models from home, all of Geely's cars will be equipped with 6ATs this year.
A year ago, Geely and Volvo entered into a technical cooperation agreement which provides that Volvo shall transfer its core technologies to Geely.
Huang Yonghe, a senior expert in Chinese Automotive Technology and Research Center (CATARC) thinks that the technology transfer from Volvo to Geely is a further benefit delivered by overseas merger and acquisition. This is the first time that the transnational automakers are willing to transfer their core technologies to Chinese automakers, which promises a better and faster progress in the auto industry of China.
According to the agreement signed by Geely and Volvo, the two companies are currently actively promoting the joint development of green engines with small-displacement and high-performance, environment-friendly small car platforms, electric cars, hybrid vehicles and plug-in cars, as well as other new energy automobile assembly system technologies.
The confidence of investment banks in the closer cooperation between Geely and Volvo is another reason that accounts for the bullish market of Geely.