What happened to Geely Automobile？ It used to be the first domestic brand, but now its sales are bleak and heavily in debt.

Geely is "unlucky" this year, but it is in a quagmire!

It is reported that the merger negotiation between Geely and Volvo will be postponed until 2021, because Geely will return to the listing of science and technology shares, and the merger can only be suspended.

As the first domestic independent brand, Geely’s market value of more than 20 billion is far less than that of the emerging forces Weilai (more than 30 billion) and Tesla (600 billion).

On the other hand, Geely has launched many electric vehicle brands, but its main product geometry is bleak, and the development of Geely’s new energy vehicles is obviously weak.

With a negative credit rating and heavy debts, why did the light of domestic cars fall here?

How did Geely, once the first domestic independent brand, break the game?

Is Geely still a car company with frequent business actions and obvious changes in executives?

The sorrow of "Brother One": Geely is no longer "Geely"

In 2017, Geely surpassed the Great Wall and Chang ‘an, and officially became the first brand of domestic independent brands in China, and it has been sitting steadily for three years. Geely’s image of "One Brother" is deeply rooted in people’s hearts.

Unfortunately, the highlight moment of self-owned brands didn’t last long. Since 2018, China’s automobile market has ended its 28-year continuous growth, and has turned into a slow decline.

Among them, the downward trend of independent brands is the most obvious. During the three years from 2017 to 2019, the total share of independent brands dropped from 43% to 39%.

Since the beginning of this year, the market share of independent brands has further declined, leaving only 36%.

As a "brother", Geely’s decline has arrived.

As can be seen from Geely’s prospectus, the total sales of Geely’s three major brands (including Lectra) in the past three years were 1,247,100, 1,500,800 and 1,361,600 respectively, which has already seen a significant decline.

In the first half of this year, Geely sold only 530,400 vehicles. Even without the impact of the epidemic, the possibility of Geely’s sales rebound is slim.

The impact of sales volume is reflected in revenue. In 2019, Geely’s performance dropped sharply by 34.67%. In the first three quarters of this year, Geely Holding achieved a net profit of 3.087 billion yuan, down nearly 50% year-on-year.

Moreover, the current liabilities of Geely Holding in the third quarter were 168.328 billion yuan, and the short-term liabilities due within one year totaled 45.724 billion yuan.

In particular, Geely’s cash flow is also declining.

At present, the net amount is only 5.219 billion yuan, and in 2017-2019, this indicator exceeded 40 billion.

However, Geely is still playing the mission of an "investment company", acquiring shares in Volvo, Proton and Lotus, acquiring shares in saxo and Terrafugia, and establishing joint ventures with China Railway and Tencent …

Geely’s response to the financial crisis is to go public in science and technology innovation board, so that it can seek public financing, which is really a good way. However, this can’t change the current decline in sales. If the car sales don’t go up, the bleak performance will continue to affect the stock price, and Geely’s follow-up pressure is not small.

Aside from the big environment, what happened to Geely, who bought Volvo against the wind?

Ten years ago, Geely’s market value was only 3 billion yuan, and Volvo’s market value was also 2 billion dollars. The news of Geely’s high-profile acquisition of Volvo was ridiculed by the industry as "snake swallowing elephant".

Affected by the financial crisis at that time, most automobile manufacturers in the world struggled in the crisis, but Geely developed six modern work brands with great fanfare, and Geely also announced that it would launch six new cars in the next 18 months and threatened to develop 42 new cars in four years.

Everyone thought Geely was crazy.

As early as 2005, when it was listed in Hong Kong, Li Shufu, the founder of Geely, entered Europe for three years and missed his ambition to enter America.

While many auto companies are still breathing, Geely is eyeing Volvo. Geely believes that Volvo is in a trough at this time, and it is bound to gain great benefits by biting its teeth to buy Volvo through the trough.

At that time, Geely changed its business philosophy from "the boss’s name is affordable car" to "safe, environmentally friendly and energy-saving car", which also coincided with Volvo’s image characteristics.

After the acquisition of Volvo, Geely was in high spirits at this time, intending to narrow the gap between BBA (BMW, Mercedes-Benz and Audi). After becoming a subsidiary of Geely, Volvo achieved an increase in sales with the help of China bonus.

But it is also cruel that Volvo doesn’t understand China.

In the next decade, competing products such as BBA promoted the localization strategy on a large scale, and more fully tapped the "China bonus" of young users and low-level cities, further widening the gap with Volvo.

BBA’s usual way of playing is to invest in film cultural products, customize advertisements, and bind its own positioning with labels such as "high-end, status", thus catering to the vast number of China consumers who are getting richer and pursuing quality of life.

What is Volvo doing at this time?

There is only one "safety card" to play. Even though Volvo is second to none in the field of safety, Geely and Volvo are relatively independent, which makes Volvo completely ignorant of China people.

"Face" and "lining", BBA chose the former and Volvo chose the latter.

That is to say, at the beginning of Geely and Volvo’s hand in hand, the agility of flaunting independent brands did not bring too many competitive chips to Geely Volvo.

Geely’s worry: exerting new energy and getting cold.

Of course, Geely will not sit still.

In 2015, Geely launched its models, and in 2018, both models were "oil to electricity", and then launched the free electric vehicle brand "Geometry".

In 2017, in order to benchmark Tesla, Polar Star became independent from Volvo and became an independent pure electric brand.

In April this year, Geely once again hatched an electric brand: Maple Leaf, and at the end of July this year, it cooperated with Mercedes-Benz to form "smart".

Geometry A, Polar Star, Maple Leaf, and smart in the future. If you add the long-distance car and London electric car under Geely New Energy Commercial Vehicle Group, there are already six new energy brands under Geely Holding.

Under the general trend of new energy vehicles, Geely is ambitious and full of energy, but no matter how you look at it, you are a little eager to achieve success.

From the perspective of brand segmentation, the geometric positioning is biased towards the middle and high end, and the maple leaf is positioned at the low end. At the same time, there are several kinds of "oil to electricity", which seem to be different brands and different positioning.

But realistically speaking, many brands of Geely are too scattered in the field of new energy vehicles. It takes resources, time and manpower to build each new brand, which leads to resource diversion, weak competitiveness and no explosion of new energy.

All Geely’s new energy sources put together are not as good as others’ new energy brands, and as long as one explosion appears, it will naturally form a chain reaction to drive other brands.

Moreover, Geely didn’t seize the time. Take Polar Star for example, Geely started to operate in 2017. At this time, the new energy subsidy is still in a stable period, and Tesla has not yet entered China, so Geely has ample room for development.

But in 2019, the sales volume of Polaris was still 0.

With limited resources, you can’t want everything. As a result, you may get nothing.

Geely has a huge system. On top of new energy projects, there are many brands such as Link. Geely cannot balance resources on new brands and technologies.

If there is another reason, it is that Tesla, as an opponent, moves too fast.

In May 2018, Tesla was registered in Shanghai, signed an agreement in July, and the site selection was successful in October. Just after New Year’s Day in 2019, the Tesla Shanghai factory officially broke ground.

Moreover, at the end of 2019, the Shanghai factory has been delivered.

In the first half of this year, Tesla Model3 sold 45,000 vehicles, far ahead of all new domestic car-making forces.

With the lapse of time, Geely’s opportunities are also disappearing. Not only the super power like Tesla is in the front, but also the new car-making forces such as Weilai, BYD and Tucki are secretly exerting their strength, and they have also gained considerable market sales and attention.

It is still very difficult for Geely to seize the opportunity to surpass it.

Geely, which is slow to shoot on new energy vehicles, missed the development time and missed the opportunity. Under the general trend of pure electrification in the next decade, how Geely can keep the market is also a problem.

finally

Just a few days ago, Geely Holding changed its CEO, and it turns out that businessmen are better at doing business.

Geely officially announced that Li Donghui officially became the CEO of Geely Holding, and An Conghui, who had previously held this position, became the president of Geely Holding.

And who is Li Donghui?

This person is very good at operation and capital operation. An Conghui, who was originally in this position, was transferred, which actually shows two development directions after Geely, one is the traditional automobile manufacturing led by An Conghui, and the other is the new technology automobile road led by Li Donghui.

It is obvious that Geely’s intention is to let a financial person build a car.

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