Geely Automobile Holdings Limited: history, ownership, mission, how it works & makes money

A Brief History of Geely Automobile Holdings Limited

Geely Automobile Holdings Limited, established in 1986 by Li Shufu, has evolved into one of China's largest privately-owned automotive manufacturers. Initially founded as a refrigerator parts maker, Geely transitioned into the automobile industry in 1997, producing its first vehicle, the Geely Xiongbao, in 1998.

By 2003, Geely had successfully listed on the Hong Kong Stock Exchange under the stock code 0175.HK. The company gained attention for its aggressive expansion strategy and commitment to innovation. In 2010, Geely made headlines by acquiring Volvo Cars from Ford Motor Company for approximately $1.8 billion, marking a significant milestone in its global expansion efforts.

In 2017, Geely's acquisition of a controlling stake in Daimler AG valued at around $9 billion solidified its influence in the global automotive market. As of June 2023, Geely holds a 9.69% stake in Daimler. The company’s strategic investments extended beyond Volvo and Daimler, encompassing stakes in various automotive firms, including a significant investment in the British sports car manufacturer Lotus.

Geely has consistently reported impressive financial performance, with a 2022 revenue of approximately RMB 164.8 billion (about $24.1 billion), reflecting a year-on-year growth of 14%. The net profit for the same period was approximately RMB 9.1 billion (around $1.4 billion), demonstrating robust profitability in a competitive market.

Geely has also made strides in technology, with a focus on electric vehicles (EVs). In 2020, the company launched its EV sub-brand, Geometry, with plans to invest over $3.5 billion in EV development by 2025. In 2022, Geely's sales of new energy vehicles reached approximately 85,000 units, contributing to its commitment to sustainability.

As of late 2023, Geely continues to expand its footprint internationally, with plans to enter the North American market and increase its presence in Europe. The company aims to achieve a total annual production capacity of 2 million vehicles by 2025, aligning with the growing demand for electric and hybrid vehicles globally.

Geely's market capitalization as of September 2023 stands at approximately $22.3 billion, reflecting investor confidence in its growth trajectory and strategic initiatives. The company operates a diverse portfolio under multiple brands, including Geely, Volvo, and Lynk & Co., catering to different market segments and consumer preferences.

A Who Owns Geely Automobile Holdings Limited

Geely Automobile Holdings Limited, a prominent player in the automotive industry based in China, has a complex ownership structure. As of the latest reports, the company is primarily controlled by Geely Technology Group, which is owned by Li Shufu, the chairman of Geely. Li Shufu holds approximately 50.13% of Geely's shares through various investment vehicles.

Additionally, Geely Automobile Holdings has a significant presence in the global automotive market, with several strategic partnerships and acquisitions that further diversify its ownership and influence. Notably, Geely owns a stake in Daimler AG and has partnerships with companies such as Volvo Car Corporation, where it owns around 100% of the shares.

Institutional investors also play a crucial role in Geely's ownership. The top institutional shareholders include:

Geely's market capitalization as of October 2023 stands at approximately HKD 133.4 billion (around USD 17.06 billion), reflecting its robust performance in the automotive sector despite global supply chain challenges.

In the fiscal year 2022, Geely reported revenues of HKD 106.2 billion (approximately USD 13.63 billion), witnessing a year-on-year increase of 9.4%. The net profit attributable to shareholders for the same period was HKD 7.9 billion (approximately USD 1.01 billion), with an earnings per share (EPS) of HKD 0.81.

Geely continues to focus on electric vehicle (EV) technologies, with plans to invest approximately USD 3 billion in EV research and development over the next five years, aiming for a significant market share in the rapidly growing EV segment.

As of October 2023, Geely's stock price is approximately HKD 26.75, positioning it as a key player within the Hang Seng Index, reflecting investors' confidence in its strategic direction and market potential.

Geely Automobile Holdings Limited Mission Statement

Geely Automobile Holdings Limited, a notable player in the global automotive market, articulates its mission through a commitment to innovation, sustainability, and customer satisfaction. The company aims to promote the development of ecological vehicles and advanced technological offerings. In their mission statement, Geely emphasizes the importance of enhancing mobility solutions while prioritizing environmental responsibility.

As of 2022, Geely reported a revenue of approximately RMB 115.0 billion (around $17.4 billion), showcasing a year-on-year growth of 14%. This indicates their robust position in the automotive sector, aligning with their mission to expand through innovative products.

Geely's mission extends to enhancing their technological capabilities. In 2020, the company established a joint venture with Volvo to develop a new range of electrified vehicles, aligning with their strategic focus on sustainability. Geely has set a target to sell more than 3 million electric and hybrid vehicles by 2025.

The company’s commitment to sustainability is highlighted through their investment of RMB 10 billion (approximately $1.5 billion) in electric vehicle technology development and production facilities over the next five years. This initiative reflects their goal to reduce carbon emissions and promote green energy solutions within the automotive industry.

In addition, Geely is expanding its global footprint, with manufacturing bases in countries like China, Sweden, and Malaysia, contributing to their mission of delivering quality vehicles worldwide. The company’s research and development expenditures reached approximately RMB 8 billion in 2022, representing a significant investment in future automotive technologies.

As per market analysis, Geely has made strides in the premium automotive market segment, aiming to enhance customer experiences while diversifying its product line with luxury vehicles. Their strategic partnership with Mercedes-Benz, which saw an investment of €2.4 billion (around $2.8 billion) in 2018, focuses on developing advanced technologies for premium vehicle lines, reinforcing Geely's mission to broaden its market reach.

Overall, Geely Automobile Holdings Limited’s mission statement articulates a clear vision for the future, emphasizing innovation, sustainability, and a commitment to customer satisfaction, backed by strong financial performance and strategic investments in technology.

How Geely Automobile Holdings Limited Works

Geely Automobile Holdings Limited operates as a global automotive manufacturer, focusing on the design, development, manufacturing, and marketing of vehicles. The company is known for its diverse range of products, including sedans, SUVs, and electric vehicles. As of the first half of 2023, Geely reported a revenue of approximately RMB 49.09 billion, reflecting a 15% increase year-over-year.

Market Position and Share

Geely is one of the largest privately-owned automakers in China. In 2022, the company held a market share of approximately 7.8% in the Chinese automotive sector. During the same year, Geely sold around 1.43 million vehicles, a slight increase from 1.32 million units in 2021.

Divisions and Brands

The company operates several well-known automotive brands, including:

• Geely Auto
• Volvo Cars
• Lynk & Co
• Polestar
• Lotus

Production and R&D

Geely's production facilities are strategically located, with major plants in China and overseas. The company spent about RMB 10 billion on research and development in 2022, focusing significantly on electric vehicle technology and autonomous driving systems.

Financial Performance

As of August 2023, Geely's market capitalization stood at approximately $21.45 billion. The company reported a net profit of RMB 3.04 billion for the first half of 2023, indicating a strong rebound from the previous year.

Global Expansion Initiatives

Geely has been expanding its footprint beyond China. In Europe, the company aims to boost its presence by promoting its hybrid and electric vehicle lineup. As of 2023, Geely plans to invest €3 billion in expanding production capabilities in Europe over the next five years.

Sustainability Efforts

Geely has committed to achieving carbon neutrality by 2045. The company introduced a new line of electric vehicles in 2023, aiming to produce over 1 million electric vehicles annually by 2025.

In summary, Geely Automobile Holdings Limited operates through a well-diversified portfolio, focusing on growth and sustainability while navigating the challenges of a competitive automotive industry. The company continues to invest in research and development to stay ahead in electric vehicle technology and future mobility solutions.

How Geely Automobile Holdings Limited Makes Money

Geely Automobile Holdings Limited, listed on the Hong Kong Stock Exchange (stock code: 00175), generates revenue primarily through manufacturing and selling automobiles. In the fiscal year 2022, Geely reported revenues of approximately RMB 101.3 billion, representing a year-on-year increase of 9%. The company's profitability is significantly driven by its diverse product lineup, including SUVs, sedans, and electric vehicles.

In 2022, Geely sold around 1.43 million vehicles. Notably, electric vehicle (EV) sales surged, contributing RMB 21.9 billion to total revenue, driven by models such as the Geometry and Zeekr brands that cater to the growing demand for green mobility.

Revenue Breakdown

Geely's profit margins have shown resilience, with a gross margin of 17.5% in 2022. The operating profit for the same year was approximately RMB 9.1 billion, translating to an operating margin of 9%.

The company has also strategically partnered with international brands. For instance, Geely holds a 9.7% stake in Daimler AG, which enhances its exposure to the luxury automotive segment. This partnership not only diversifies revenue streams but also facilitates technology transfer in the realms of electric and autonomous driving technologies.

Geely’s Investment in Electric Vehicles

Geely has allocated substantial resources toward the development of electric vehicles, aiming to invest over RMB 100 billion in research and development between 2020 and 2025. This investment is projected to yield a range of new electric models, reinforcing Geely's presence in the EV market.

The introduction of the Zeekr brand is central to this strategy, with a target of selling around 650,000 units by 2025. The Zeekr 001, an electric performance vehicle, has already received high demand, showcasing Geely's commitment to innovation.

Market Trends and Future Outlook

As of October 2023, the global automotive market is witnessing a significant shift towards electric vehicles, with EV sales projected to account for 20% of total vehicle sales by 2025. Geely's proactive approach in expanding its EV offerings positions it favorably against competitors.

The company's strategic acquisitions, such as the purchase of a majority stake in Volvo Cars and the establishment of the Lotus brand as a performance EV manufacturer, further bolster its position in the market. These acquisitions have enabled Geely to leverage advanced technologies, enhance brand portfolios, and expand global market reach.

Overall, Geely Automobile Holdings Limited's revenue model is multifaceted, with a robust focus on passenger vehicles and a significant pivot toward electric mobility, ensuring continued growth in a rapidly evolving automotive landscape.