On September 16, the GEELY Galaxy L6 officially launched at a starting price of 115,800 RMB, a mere 108 days since the release of the GEELY Galaxy L7.
Such a rapid release pace, coupled with such a competitive price, evidently results from GEELY’s product line strategy to quickly seize market opportunities. From a broader perspective, it is also a result of the entire Geely’s aim to expedite its transition towards newer energy strategies.
Interestingly, on the day of the Galaxy L6 launch, the Asian Games Phantom Edition of the GEELY Galaxy L7, priced at 185,700 RMB, also arrived. Its primary function is the ‘NOA Advanced Intelligent Driving Assistance System’, essentially focusing on intelligent driving.
Further demonstrating their commitment, Galaxy L7 users who had received their cars before September 16, can swap their Galaxy L7 to the Asian Games Phantom Edition at original price in October, they will also receive two years of NOA software use right.
So, in reality, the highlights of GEELY’s presentation also included intelligent driving aspects. Considering the role of Geely Galaxy in Geely as a whole, we can sense Geely’s pressing pace towards intelligent transformation, covering its mainstream markets.
Of course, this achievement didn’t occur overnight, but is a result of Geely’s multi-year planning.
In fact, on the day of the Geely Galaxy L6 launch, we had an in-depth discussion with Geely’s CEO, Mr. Gui Jia Yue, where he spoke about the thinking behind Geely Galaxy’s development, and Geely’s strategic transition towards electrification and intelligence.
Below are key points from the interview, edited to maintain original meaning.
Q: What were the main challenges when you took office as CEO of Geely? How did you address them?
A: First of all, it’s about morale, and faith. The Chairman asked me how I planned to develop new energy vehicles. I answered with nine Chinese characters, which translate as ‘choosing the right path, employing the right people, and allocating funds wisely’. The key to progress is having a clear strategic and product direction and backing it with appropriate investment. The right people are those who believe in the mission, regardless of their position. Lastly, value needs to be distributed wisely. A strategic direction is impossible without resource allocation. For example, we can’t achieve success in new energy without a clear understanding of batteries and electric drives.
And so, Geely has been quietly laying the foundations, honing its internal capabilities with an aim to strengthen its basic technology and resources. Now, Geely is in the era of Vehicle Architecture 4.0. We have firmly launched the ‘China Star’. The Xingyue L was the first product in China to adopt the Qualcomm Snapdragon 8155 chip. Had it not been affected by chipset issues, it would have definitely sold over 20,000 units in a single month.Moreover, I stress the need to create a “Greater Geely” across the entire value chain, including Geely, suppliers, and dealers, forming a “shared destiny community”. Among dealers, suppliers, and Geely, all are parties B, and the customer is party A. With this idea in place, the ultimate objective is to match production with orders.
An additional point is the dealer model. I believe it should be “direct connection”, not “direct operation”. Direct operation is indeed important, but the essence of direct operation is actually direct connection, finding the basic points of customers, achieving the direct connection between the manufacturer and the customer through the system, so as to serve the customer well.
Q: What changes has Geely made in terms of channels and operation in the field of new energy?
A: To develop, enterprises need a mindset of constant change. Once the strategies are set, we have many measures.
For example, our burden was heavy in 2021, we decided to focus on new energy, but we couldn’t abandon fuel vehicles, so we had to stay rooted in the present. Therefore, the first step was to change organizationally. Geometry Auto wasn’t doing well at that time, we have nothing to hide. But we need to dig deep into why it didn’t do well, I think it was because the organizational structure had problems. Therefore, in April and May, we immediately separated the Geometry Research Institute. Why did we separate it? Because the logic of fuel vehicles and the logic of new energy are completely different, from electronic and electrical architecture to control logic.
Geometry sold particularly well in 2022, because we pay attention to every detail of new energy vehicles. One and a half years have passed, and from January 1 this year, the Geometry Research Institute has again incorporated Geely Brand Research Institute, we all need to move towards new energy, because we’re evolving from “starting to new” to “completely to new”. From strategy to the front end, including the supply chain, manufacturing, and R&D, all need to link the product with the brand. I said that Geometry couldn’t be called a brand, it’s just a series under Geely, because the resources didn’t match up, so we must subtract at this time.
So how does Geely make a complete move to new energy? That is resource matching, we have introduced the Galaxy series. Now Geely’s sales company is divided into three divisions: Geely Star Business Division, Geometry Business Division, and Galaxy Business Division, with no interference between each other. My requirements for the Galaxy series are also high, it needs to have four independent features: independent storefront, independent team, independent funding, and independent account.
From announcing the Galaxy series in February to now, less than 7 months, we have a new car every quarter, the speed is very fast; we have more than 450 channels now and are changing every day, will increase to about 700 by the end of the year. All the storefronts are independent, the LOGO is luxurious and youthful, the store image and team are new. We don’t focus on whether it’s a new dealer or an upgraded old dealer, the same standards must be followed. The evaluation logic has also changed. Previously we focused on orders, now we look at the driving experience and the source of leads, completely according to the new energy mode.
Q: How should Geely’s benchmarking culture be deciphered under the new circumstances?
A: Benchmarking culture is not about benchmarking against the automobile industry, but must be benchmarked according to professionalism.
The improvement in Geely’s product quality can be summarized into several regularities. In the 3.0 era, the improvement in Geely’s products referred to VOLVO’s standards, i.e., VOLVO was our teacher; by the 4.0 era, it turned into everyone working hand in hand; till now, we are helping them in development.
Acquiring Meizu is for the purpose of achieving scale, as mobile phone chips are one to two generations ahead of automotive-grade chips. To ensure the advancement of automotive-grade chips, we must establish a connection with the underlying technology of mobile phones. After making this connection, we leveraged their standards to develop the Galaxy N OS. As such, it’s evident that the Galaxy N OS and previous car systems are vastly different — it’s a radical shift. The in-car systems of the Lynk & Co 08 and Geely Galaxy series, the Galaxy N OS, are both newly built from scratch, and they share the same foundational logic.
Regarding big data and large-scale models, we can now offer a variety of customizable features, including wallpapers and picture books. More great products will be available in the future. Large-scale data models require computational power, and we have already laid out an in-depth plan in this regard. In order to see things through, we shouldn’t leave ourselves a way out. Instead, we should focus on choosing the right path, recognizing the correct direction, and allocating resources properly. The tenacity and spirit of Geely is exceptionally strong.
Q: What is Geely’s Galaxy series vehicle layout plan?
A: Why did we present seven vehicles all at once? The answer is simple: Geely only speaks after accomplishing the task at hand. Geely’s “Embracing the New” strategy is all-encompassing. As to how this will be achieved, that’s up to each CEO and their team. My chosen path is to unfailingly transform the Galaxy series into Geely’s new energy lineup.
Geely has no shortage of brands, what it lacks though, is recognition for its “new energy” attribute. I’ve conducted some research, and customers often say: “I trust Geely when it comes to gasoline vehicles, but I’m not so sure about their new energy vehicles.” To change this perception, we need to embrace the Galaxy series and speed up the launch of new vehicles to showcase Geely’s new energy commitment.
Fuel powered cars are unlikely to be entirely replaced. Given the future development of new energy, there will be considerable pressure on the power grid. If the ratio of new energy cars increases too much, there will be limitations on electric supply. Currently, the highest penetration rate of new energy cars is only 37%, which isn’t a large proportion. China has about 300 million cars, and only 20 million of these are new energy vehicles, which only account for six to seven percent. Although this proportion will vary if it hits 20%.
Q: How will Geely’s new energy refresh its value in the capital market?
A: The results are reflected in sales figures and sustainable business development. Sales figures represent social recognition.
Sustainable development is represented by innovation in new technologies. If a company lacks innovative technologies, it will not hold any product value. Moreover, sustainable development also involves issues like carbon emissions and social responsibility. Geely’s factory standards can be compared to industry standards, and the advanced equipment and technology ensures lower emissions, higher quality control, and greater social responsibility. Our Xi’an factory achieves zero emissions in the dark, something that few in the industry can manage.
Q: How do we measure our lead or gap compared to competitors?
A: I will use one metric to answer your question: single-store sales. Single-store sales are essential for evaluating the health of a brand. How many units does a competitor sell in their 4S shop in a city? Some have figures reaching 40 to 50, but this may not be sustainable.
Geely strives for high-quality development, which is demonstrated by our per-store sales. Why should I transform dealers and suppliers into a large Geely family? I’m accountable to everyone, and it’s only considered truly good when everyone fares well. We don’t chase quantity, but quality. Currently, those Geely dealers with single store monthly sales surpassing 100 cars, make up 30~40%, and the only model they sell is the GEELY L7. Increasing supply models will further boost the per-store sales.
Q: Will GEELY evolve into a standalone brand in the future?
A: Geely epitomizes the new force. The new force doesn’t signify “Companies inexperienced in auto industry diving into it”. It suggests a capacity and determination for change. Isn’t that what the new force is about?
Faced with the challenge of “transitioning to a new era entirely”, Geely’s ability to transform is strong. The cars we’re able to manufacture, which were once prohibited, clearly showcase our transformative ability and power. If lacking these, you can’t call it the new force. First and foremost, our mindset is definitely aligned with the new force philosophy.
Q:How will Geely internally shape different teams into a systematic collaborative force?
A: Many years ago, not many agreed with Geely’s idea of multiple brands. Nowadays, multiple brands have become commonplace in many companies. However, the term multi-brand for Geely isn’t fitting; a more appropriate term would be multi-level, with consumer groups categorized according to these levels or distinct cohorts.
Geely’s brand planning is distinct. ZEEKR primarily targets the Plus CNY 300,000 pure electric intelligent vehicle market; Lynk & Co specializes in superior hybrid electric vehicles, addressing a wide range from CNY 200,000 upwards, including the CNY 300,000 to 400,000 segment. The Geely brand primarily focuses on the around CNY 200,000 price point, and can cater to the lower price segment as each brand undertakes a unique strategic function. Essentially, Geely’s intelligent driving and cabin features will vary according to the vehicle’s positioning, and consequently, technological pathways will differ.
At Geely, our intelligent driving solution focuses foremost on value. High value doesn’t mean low price or poor performance, but optimizing the product to its maximum potential. We pursue user-friendliness and value, not TOPS.
In the background, our technical committee comprehensively collaborates with the brands. Lynk & Co and ZEEKR are capable of borrowing and reusing, with a lower royalty fee. Bigger contributions involve collective large-scale procurements, and the immense cost difference between bulk buying and individual buying stands as a testament to this. Furthermore, we also disassemble components or parts to procure second-tier or third-tier parts, a strategy that greatly enhances our advantage. The comprehensive synergy between supply chains and technology resulted in greatly benefits.
Q: As the CEO of Geely, how do you evaluate yourself?
A: Having worked at Geely straight out of university, I believe it’s not about the individual’s role, but the organization, system, and culture that played pivotal roles in its growth. Many critics believed the “Smart Geely 2025” strategy was far-fetched. However, I continue to believe in the Geely culture – we never give ourselves an escape route.
On the contrary, we are even more firm in our clear goals and direction. Leveraging the resources of the entire group, we advance in the determined direction aiming to reach or surpass our goal. I believe in a systematic ability and cultural power to drive the progression of the entire corporation. Obviously, the strategic direction is absolutely vital, and our route is to firmly follow the group’s designated direction without deviation.Q: Have there been any particularly anxious moments for you in these past three years?
A: It’s not the traditional car leader’s anxiety, nor the automobile enterprise leader’s anxiety, but anyone who runs a business feels anxious. A person who feels no anxiety about a business will not run it well. This ‘anxiety’, I call it ‘responsibility’. A true entrepreneur must have a sense of responsibility and worry, but should not let it turn into anxiety. There should instead be direction, method and order.
The auto industry also faces ‘a major change that has not been seen in a hundred years’. Previously, we referred to it as a ‘three-way junction’, now it’s referred to as an ‘N-way junction’. Why? Before, there was only one direction for fuel cars, now we’ve added a new energy direction. The three words ‘New Energy’ still represent a generalized new energy, there’s also hybrid power and extended-range, as well as pure electric. The planning for vehicle machines and intelligence needs to be carried out in sync.
We need to take advantage of our strengths and continue to innovate and change. As long as we can exert our abilities, keep our thinking open-minded, not close ourselves off and build cars in a closed environment, and embrace the outside world with a more open attitude, we can surely enable the business to have better and sustainable development ability.
This article is a translation by AI of a Chinese report from 42HOW. If you have any questions about it, please email firstname.lastname@example.org.