Geely boss Li Shufu speaks of prolonged engagement – and does not see himself as a competitor: what the “Henry Ford China” intends to do with Daimler

02/24/2018

Geely boss Li Shufu speaks of a longer commitment – and does not see itself as a competitor What Daimler’s new major shareholder from China sets

REUTERS

Largest Daimler shareholder – and at the same time a competitor: Geely CEO Li Shufu wants to promote electromobility with the people of Stuttgart

The new Chinese major shareholder Geely has promised the Stuttgart carmaker Daimler a long-term commitment. He was pleased to “accompany Daimler on its way to become one of the world’s leading providers of electric mobility,” said Geely CEO Li Shufu in a statement on Saturday.

The Chinese billionaire had previously acquired just under 9.7 percent of Daimler’s shares and thus became the largest single shareholder in one fell swoop. Another increase is not planned until further notice, it said.

“Competitors who challenge us technologically in the 21st century do not come from the automotive industry,” Li said. “We need friends and partners to join forces with these” intruders from outside “. “It’s time for a new way of thinking, and my involvement with Daimler reflects that vision.”

The Henry Ford of China

The name of the car manufacturer Geely is derived from the Chinese word “jili”, which means “luck” or “auspicious”. At the helm of the private enterprise is Li Shufu, who has turned the Chinese auto industry upside down.

For many Chinese, Li is considered an idol because he has come to wealth mainly through diligence and hard work. In the past year alone, the assets of the 54-year-old, according to the US magazine “Forbes” on 17 billion dollars more than tripled, because the share of Geely on the stock market began to soar.

In 1981, at the age of 18, Li Shufu borrowed 120 yuan – or twelve euros today – from his father, a rice farmer. He bought a camera and started doing business with photos. The real entrepreneurial career began in the mid-80s when he started a refrigerator factory with friends. Later, the young entrepreneurs built motorcycles from Taiwan.

In 1998, the “Chinese Henry Ford”, as some call it today, the license to produce cars. His company – now under the new name Geely – started with the production of vehicles. While Li Shufu sold his cars highly profitable to the growing Chinese middle class, he was not able to convince with his quality in Europe and the USA for a long time. In order to nevertheless make the entry into the foreign market, Geely bought in 2010 at Volvo.

This was a stroke of luck for the Swedes, who were at that time in need of payment. Thanks to improved access to the Chinese market, sales rose sharply in the following years.

Most recently, Li Shufu continued its overseas expansion with acquisitions of London Taxi and the British sports car brand Lotus. With the new Lynk brand, the Geely Group CEO also wants to tackle the European car market even more strongly from 2019 onwards.

Li Shufu overtakes Kuwait state fund as the largest shareholder

For weeks it was speculated that the bustling Geely boss could plan a major entry into the Dax Group. So far, the Kuwait sovereign wealth fund was the largest shareholder with 6.8 percent, the corporation does not have a real anchor shareholder.

As a market, Daimler has had excellent experiences with China in recent years. After the Stuttgart followed the competition of BMW and Audi in the most important car market in the world, they built up the sales network, among others, and since then have benefited from dazzling growth rates in sales. Also at Daimler Show stock market chart is China meanwhile the most important single market.

Geely also became late last year At the commercial vehicle manufacturer Volvo Trucks, it is the largest shareholder, The financial investor Cevian sold his entire share package of 8.2 percent and 15.6 percent of the voting rights to Volvo Trucks to China. Until 1999, car and truck manufacturers still belonged together, since then they only use the brand together.

Geely wants to promote internationalization

With the purchase of Volvo cars, the Geely took over in 2010 from the US car maker Ford, the Chinese were the first serious player in the global car market. The Sweden brand has been using Geely’s entry level eight years ago, as Volvo was able to significantly boost its sales in the Chinese market after the deal.

Recently, the Chinese parent company blessed a departure from the pure combustion engine at Volvo. As the first major traditional brand, the Swedish carmaker wants to produce new model series from 2019 only with electric drives, including electric cars, hybrid engines and burners with a supporting electric motor (so-called mild hybrid).

Above all, the swing at Volvo is a reaction to the new market conditions in China. There, the government has taken a number of measures to boost the sale of alternative-powered cars. Smog-stricken cities like Beijing and Shanghai barely have new registration plates for petrol-engined cars. E-car buyers benefit greatly from government subsidies.

In addition, the government ordered a production quota in September. According to a points system, therefore, from 2019 ten percent of the produced vehicles must have a hybrid drive or a pure electric motor. For this reason, unlike most German manufacturers, Geely has a long list of vehicles with electric drives in their product range. Geely is not considered stingy when it comes to treading new ground with high investment – as with Volvo.

la / dpa

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