Why Geely’s billionaire founder Li Shufu wants more iconic British car brands
Geely’s Li Shufu is looking to transform the Chinese conglomerate from a carmaker into a provider of transport services such as car-sharing, flying taxis and high-speed trains
When car tycoon Li Shufu emerged as a suitor for Volvo Cars a decade ago, few outside China had heard of him. Now the billionaire’s name pops up as soon as there is a whiff of a deal in the industry.
Not only did Li’s Zhejiang Geely Holding Group snap up Volvo in 2010, he made the acquisition work and followed up with purchases of Lotus Cars, London’s iconic black cabs and a stake in Daimler AG. Last week, Geely emerged as a potential investor in Aston Martin, and last year was approached by the parent of Jaguar Land Rover for a potential tie-up.
Li’s track record of making deals succeed puts Geely in the driver’s seat in Asia as carmakers seek alliances. The industry is facing a tectonic shift toward electrification, self-driving vehicles and mobility services, which are crimping demand for individual car purchases and squeezing out weaker players.
“Li Shufu believes the industry doesn’t need so many players in the future,” said Shi Ji, an analyst with Haitong International Securities in Hong Kong. “Geely’s success with Volvo has made it more confident that it can develop faster via mergers.”
Defying the odds
Li cemented his reputation as a savvy deal maker by reviving Volvo Cars in the face of widespread industry scepticism. He gave the Swedish manufacturer’s engineering team the resources to invest in new models. He also lowered Volvo’s high costs by jointly developing vehicle underpinnings with Geely, while building a plant in China for exports to markets including the United States.
“Chinese entrepreneurs see global acquisitions as a fast track of growing their business,” said Xu Haidong, an assistant secretary general of China Association of Automobile Manufacturers. “Geely has demonstrated to the world that they can make it work.”
More acquisitions and discussions over the globe ensued. Last year, Geely was approached by the owner of Jaguar Land Rover for a deal over the beleaguered British luxury business, following earlier reported interest in Alfa Romeo and Maserati (something the company denied).