Eliza Wong
Geely’s Consolidation Strategy Unfolds
On September 15, Geely Automobile Holdings Limited (吉利汽车, 0175.HK) announced that its proposed merger and privatization plans for Zeekr (极氪) received formal approval at the shareholder meeting. Gui Shengyue (桂生悦), CEO of Geely Automobile, indicated that the consolidation between Geely and Zeekr is expected to conclude by the end of this year. This move is part of Geely’s broader “One Geely” strategy, aimed at streamlining operations, reducing redundancies, and enhancing competitiveness in the global electric vehicle (EV) market.
Organizational Reshuffle and Brand Independence
Following the approval, Zeekr and Lynk & Co (领克) have begun implementing strategic integration, with the merged entity named Zeekr Technology Group (极氪科技集团). Recently, Geely Group established the Zeekr Vehicle Research Institute, incorporating product lines such as Zeekr 9X, Zeekr 007, and Zeekr MIX. Similarly, Lynk & Co established its own research institute, overseeing L and K product lines. This reorganization signifies that despite being integrated into Geely Group, Zeekr and Lynk & Co will operate independently, each focusing on distinct market segments and innovation pathways.
Strategic “Subtractions” for Efficiency Gains
Geely’s “One Geely” strategy emphasizes reducing redundancies and optimizing resource allocation across its brands. The consolidation has yielded significant benefits, particularly in supply chain management and research and development (R&D).
Supply Chain and R&D Synergies
With a combined global annual procurement exceeding CNY 200 billion, Geely’s consolidated purchasing power has enabled cost reductions of at least 5% on battery procurement. This efficiency boost contributed to Zeekr’s impressive gross margin of over 20% in Q2 2023. Additionally, R&D redundancies have been minimized. Previously, Zeekr, Lynk & Co, and Geely Galaxy (银河) operated with overlapping investments in technology and supply chains. Post-consolidation, these brands now share a unified smart electric platform, with the SEA浩瀚架构 (Zeekr) and SPA Evo architecture (Lynk & Co) achieving interoperability. Core modules, including three-electric systems and electronic electrical architecture, now boast a reuse rate exceeding 70%, reducing R&D costs by 30%.
Channel Integration and Cost Management
Lin Jie (林杰), who oversees marketing for both Zeekr and Lynk & Co, has spearheaded channel reforms. Zeekr, which previously relied on a direct sales model, has introduced a partner (agency) model to expand its presence in lower-tier markets. These efforts are reflected in Geely Automobile’s H1 2023 financials, with marketing and R&D expenses as a percentage of total revenue declining year-over-year. Specifically, Zeekr’s Q2 R&D and marketing expenses fell by 42.9% and 9.7%, respectively.
Challenges in Zeekr’s “Additions”
While the consolidation has driven efficiencies, Zeekr’s contribution to Geely’s overall performance has been mixed. The brand faces challenges in maintaining its premium positioning and market share.
Declining Average Selling Price and Delivery Numbers
In H1 2023, Zeekr’s average selling price (ASP) dropped from CNY 246,000 to CNY 230,000, the steepest decline among Geely’s brands. In contrast, Geely Automobile’s overall ASP decreased by less than CNY 10,000 to CNY 80,000, while Lynk & Co’s ASP remained stable at CNY 137,000. Delivery data also highlights Zeekr’s struggles. Although combined deliveries of Zeekr and Lynk & Co increased by 9% year-over-year in Q2, this growth was primarily driven by Lynk & Co. Zeekr’s deliveries fell by nearly 10% to 49,337 units, while Lynk & Co’s deliveries rose by 26%. Since Q3 2022, Lynk & Co has consistently accounted for over 50% of the combined sales, reaching 62.3% in Q2 2023.
Brand Positioning: “Zeekr Up, Lynk & Co Wide”
Lin Jie emphasized that the integration is not merely a merger but a strategic repositioning. Zeekr will focus on upward mobility in the premium segment, targeting global luxury tech consumers with high-value, innovative products. Lynk & Co will broaden its appeal across mainstream markets, offering diverse energy solutions (fuel, HEV, PHEV, BEV) in the CNY 150,000–300,000 range. This differentiation aims to minimize internal competition and maximize market coverage.
The Zeekr 001 Conundrum: From Star Player to Struggling Contender
The Zeekr 001, once a trailblazer in the electric猎装轿跑 (shooting brake) segment, has seen a dramatic decline in sales. Launched four years ago, it dominated its niche with unparalleled features: 3.8-second acceleration, dual-motor AWD, 100 kWh Qilin battery, CDC, air suspension, and 8295 chip with lidar. However, its sales plummeted in 2023, with monthly figures dropping to 2,000–3,000 units from a peak of 10,000 units.
Competition and Missteps
The rise of competitors like the Xiaomi SU7 (小米SU7) has eroded Zeekr 001’s market share. Xiaomi’s entry into the EV space, coupled with its strong brand appeal, directly challenged Zeekr’s dominance. Compounding this, Zeekr’s decision to release three iterations of the 001 within a year—2023, 2024, and 2025 models—backfired. The 2024 model offered a CNY 20,000 price cut and an 800V platform upgrade, while the 2025 version added dual NVIDIA Orin-X chips with 508 TOPS computing power. These rapid changes alienated existing owners, leading to accusations of “backstabbing.” At a recent earnings conference, Gui Shengyue apologized: “We have learned profound lessons. On behalf of Geely Automobile, I sincerely apologize to all users who felt betrayed by our actions.”
Reviving the Zeekr 001: Path to Redemption
To reclaim its position, Zeekr must address two critical areas: service excellence and technological innovation. The recently launched Zeekr 9X, priced from CNY 479,900, has generated optimism with 40,000 pre-orders within an hour. It features the浩瀚超级电混 (Haojan Super Hybrid) system,浩瀚AI数字底盘 (AI Digital Chassis), and千里浩瀚智能辅助驾驶 (Qianli Haojan Smart Driving). However, sustaining this momentum requires more than just product launches.
Service and Smartization as Differentiators
Under Lin Jie’s leadership, Zeekr has intensified its focus on service quality. The brand now mandates that sales staff secure a perfect 10/10 rating from customers after interactions, with proof required via photos in work groups. Additionally, “mystery shoppers” are deployed to evaluate service attitudes. However, these measures risk being perceived as superficial. True premium service entails seamless aftersales support, which Zeekr has struggled with due to shared service networks with Lynk & Co. For instance, owners in Shenyang reported waiting months for parts to address minor issues like body noise.
Technological Independence and Innovation
The establishment of the Zeekr Vehicle Research Institute is a step toward reclaiming technological autonomy. Previously, Zeekr’s innovations, such as the SEA浩瀚架构 and金砖电池 (Golden Brick Battery), were shared across brands. With the creation of吉曜通行 (Ji Yao Tong Xing) to consolidate battery operations, the Golden Brick Battery was rebranded as神盾金砖电池 (Shen Dun Golden Brick Battery), diluting Zeekr’s exclusive edge. Moving forward, Zeekr must leverage its独立研究院 (independent research institute) to develop unique, cutting-edge technologies that reinforce its premium positioning.
Looking Ahead: Strategic Imperatives for Zeekr and Geely
Geely’s consolidation strategy has undoubtedly enhanced operational efficiency, but Zeekr’s revival hinges on its ability to differentiate itself in a crowded market. The brand must balance innovation with customer-centricity, ensuring that technological advancements are matched by unparalleled service experiences. As Gui Shengyue noted, “We are committed to learning from our mistakes and delivering value to our customers.” For investors and industry watchers, Zeekr’s journey offers critical insights into the challenges and opportunities in China’s evolving EV landscape. To stay ahead of market trends, subscribe to our newsletter for real-time updates and analysis.
