Recently, Geely Holding Group released its sales report for July 2024. The total sales volume of the month was about 24.58 units, a year-on-year increase of 10%. Among them, the sales of new energy vehicles were 110,000 units, a year-on-year increase of 42%.
It can be seen that Geely Holding Group's new energy vehicle sales have increased significantly, and Geely is struggling to catch up with competitors in the field of new energy vehicles. In this context, the market has placed higher expectations on it, can the former domestic first brother regain the "king" throne? Can ZEEKR, which has just landed on the U.S. stock market, turn around its losses this year?
New energy vehicles are growing strongly
According to the sales report, Geely Holding Group's total sales in July were 245,752 units, up 10% from the same period last year. Among them, sales of new energy vehicles reached 110,042 units, an increase of 42% over the same period last year.
From January to July 2024, Geely Holding Group's cumulative sales reached 1,739,467 units, up 23% year-on-year, new energy sales of 696,522 units, up 48% year-on-year, and international sales of 690,478 units, up 23% year-on-year.
Geely Automobile Group's total sales were 150,782 units, up 13% year-on-year, of which 59,051 new energy vehicles were sold up 58% year-on-year. Volvo Cars' global sales were 57,447 units, up 6% year-on-year, and NEV sales were 27,879 units, up 49% year-on-year. Proton sold 15,103 vehicles, up 13% year-on-year. All brands showed strong growth momentum.
Geely Holding Group said that the company has delivered outstanding data in the field of new energy vehicles, which also reflects the overall growth trend of the new energy vehicle market and the increasing acceptance of new energy vehicles by consumers.
In the face of deep changes and new opportunities in the industry, Geely Automobile will launch an intensive offensive against new energy vehicles in 2023. At the technical level, Geely Automobile released a new and upgraded Thor hybrid series of products, and based on this technology, it launched a mid-to-high-end new energy series "Geely Galaxy", which has sold more than 110,000 units in nine months, becoming a new driving force for Geely to accelerate its transformation to intelligent new energy. ZEEKR also launched two new models last year, and the cumulative delivery volume increased by 65% year-on-year.
Sales volume continued to grow rapidly, and Geely Automobile's operating performance also improved. In 2023, Geely Automobile will achieve revenue of 179.2 billion yuan, a year-on-year increase of 21%, a record high; The net profit attributable to the parent company was 5.308 billion yuan, a year-on-year increase of 51%.
The operating performance has been steadily improving, and the market has higher expectations for Geely Automobile. Can the former "domestic first brother" return to the throne?
It may be difficult to return to the "first domestic production".
At the 2023 results conference, Geely Automobile CEO Gui Shengyue confidently said that Geely Automobile will return to the position of the nation's No. 1 brand. Can Geely really do it?
From the perspective of Geely's development history, Geely Automobile, founded by Li Shufu, has achieved good results in the early days by adopting the method of surrounding the city from the countryside and occupying the market at a low price. Before 2014, Geely had launched brands such as King Kong and Panda, but due to too many categories, unclear positioning, and weak overall brand power. Subsequently, Geely launched the "three major brands return to one Geely", and launched the Emgrand, Boyue, and Borui Vision series, and most of the models became popular models after they were launched.
In 2017, Geely's sales increased rapidly, reaching 1.248 million units. In the same year, Geely Automobile's share price rose by 342% to an all-time high of HK$28.29. It was also this year that Geely's market value surpassed BYD for the first time and became the car company with the highest market value among the three major domestic brands. The chart below shows the change in market capitalization between Geely and its main competitors before 2021:
At the same time, Geely was not satisfied with the low-end market, and the company began to enhance its brand positioning and enter the mid-to-high-end market. In 2017, the mid-to-high-end brand Lynk & Co was launched, and in 2018, the sales of Geely and Lynk & Co exceeded 1.5 million units, reaching the peak of sales.
In 2015, Geely launched the Blue Geely Initiative, a new energy transformation program that aims to achieve more than 90% of NEV sales by 2020. However, the results of the "Blue Action" are far below Li Shufu's expectations, with only 68,000 new energy vehicles sold in 2020, accounting for only about 5% of sales, far from the target of 90%. In the same year, its share price fell to around HK$9, losing two-thirds of its market value from its high.
It can be seen that Geely made a clear mistake in formulating its strategy at that time. First, 90% of new energy sales accounted for too aggressive, which did not match the industry environment at that time; The second is that the "oil to electricity" has caused consumers' perception of the brand to be unclear.
In addition, Geely gradually shifted its attention to the operation of the capital market, and its acquisitions were booming, promoting the listing of Volvo, Polestar, Lotus, Zeekr and other companies. In October 2021, Geely Automobile launched the "Nine Dragons Action" plan, investing 150 billion yuan in R&D in five years, realizing full-stack self-development of autonomous driving in 2025 and launching more than 25 new intelligent new energy products within five years.
At present, although the "Nine Dragons Bay Operation" has achieved initial results, it is still too early to judge whether it has been successful.
ZEEKR was successfully listed, and wants to turn around its losses this year?
An Conghui, CEO of Geely Holdings, mentioned at the performance briefing that Zeekr's goal this year is to turn around its losses and achieve a successful listing.
At present, regardless of whether ZEEKR can turn around its losses, the goal of listing has been achieved. After NIO, XPeng and Ideal, ZEEKR has become the fourth Chinese new energy vehicle company listed on the US stock market.
In May 2024, Geely Holding's ZEK Intelligent Technology (ZK) was listed on the New York Stock Exchange, becoming the fastest automotive technology company from its inception to listing. In comparison, Tesla, Xiaopeng Motors, and Li Auto took 7 years, 6 years, and 5 years respectively, and NIO went public 4 years after its establishment, and ZEEKR only took 3 years.
However, the performance of ZEEKR is a hard injury. From 2021 to 2023, ZEEKR's revenue will be 6.53 billion yuan, 31.9 billion yuan, and 51.67 billion yuan respectively; The net loss was 4.51 billion yuan, 7.66 billion yuan and 8.26 billion yuan respectively. Not only has the cumulative loss exceeded 20 billion yuan in three years, but the range of losses is still expanding. Judging from the data, it seems that it is a bit difficult to turn around losses this year, making cars is a bottomless pit, and selling cars at a loss is a hurdle that new forces must overcome.
Judging from the stock price performance, the market does not seem to be optimistic about its future development. After the listing, ZEEKR's stock price fluctuated all the way down and has been in a downward trend.
Overall, from 2019 to 2022, Geely Automobile's sales continued to be sluggish for four years due to the slow pace of new energy transformation. Li Shufu adjusted his strategy in a timely manner and carried out a series of new energy layouts, and finally delivered a good performance answer sheet in 2023, and his sales volume has continued to increase since the beginning of this year. However, if it wants to return to the "king" throne, Geely still needs to continue to work hard.