On February 14th, a significant move in the competitive landscape of the automotive industry was announced by An Conghui, CEO of Geely Technology Group and President of Geely Holding GroupHe commented on the strategic implications of the merger between the two brands, Zeekr and Lynk & Co. "This is not merely about market price wars; it is about technology, product quality, and brand strength in the face of fierce competition," he said to a group of journalistsThe announcement came after both companies confirmed that Zeekr had successfully acquired 51% of Lynk & Co.'s shares, officially taking control just three months after they expressed intentions to strategically integrate.

The rationale behind this merger can be primarily attributed to the highly competitive nature of the automotive market in ChinaIndustry experts believe that in the next two to three years, factors such as cost and technology will dictate competition in the burgeoning new energy vehicle sectorCompanies that can unify their efforts and collaborate effectively are expected to flourish as they consolidate their resources and streamline operations.

Geely Holding, one of China’s largest automobile manufacturers, embarked on this merger with a clear strategic visionMarket analysts have been closely observing what the strategic realignment of these two brands would lead toAn Conghui articulated the merger's underlying philosophy, emphasizing the dual-brand strategy adopted by Zeekr Technology Group, which was designed to promote shared resources while maintaining distinct channels for each brandHe reassured stakeholders that while some channels might be shared, the integrity of each brand will be preserved, keeping the products showcased distinctly within their respective dealerships.

This merger represents a pivotal moment for Geely Holding and its aspirations of becoming a formidable player in the luxury electric vehicle market, often compared to the likes of Germany’s premium automotive trifecta: BMW, Mercedes-Benz, and Audi, known as the 'BBA' of the industry

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The driving force behind this move was encapsulated in Geely's Taizhou Declaration from September 2024. The company articulated a strategic shift, channeling efforts into core automotive ventures while exploring technological ecosystems that bolster competitive advantages and support sustainable development.

Three months into the strategic merger, on February 14, Zeekr completed the acquisition of Lynk & CoFollowing the deal, Lynk & Co. now consists of a 51% stake owned by Zeekr and a 49% stake retained by Geely Motors, positioning Lynk & Co. as a non-wholly owned subsidiary of ZeekrThis maneuver came with significant monetization, including the sale of stakes valued at approximately 9.37 billion yuan, as Geely aligned financial resources to maximize the merger's efficacy.

Individuals closely affiliated with the companies noted that as of January 2025, Zeekr Technology Group's total sales exceeded 42,000 units, solidifying its position as a leader among new luxury vehicle brands in ChinaThis year, they plan to unveil five new models, primarily hybrid vehicles within the mid and large SUV categories, targeting an ambitious annual sales goal of 710,000 units, which signifies a staggering 40% growth rate.

The streamlining of R&D resources was a significant factor leading to the mergerAn noted that before the merger, product overlaps and redundant research efforts were already surfacing, prompting the necessity for integrationThe future product trajectory has been strategically plotted post-merger, with Zeekr aiming to position itself in the higher-end luxury market while Lynk & Co. focuses on the hybrid segment.

The management structure of the newly formed entity is also set for a modernization overhaulAn announced plans to enforce a unified management framework, which will revolutionize internal operations across product development, manufacturing, user experience, and advanced intelligence systemsThe merger aims to create a 'dual-brand value pyramid' while leveraging AI technologies to enhance operational efficiency significantly across the board.

With the rise of AI technologies, An shared aspirations that 2024 will mark Zeekr’s venture into AI with over 100 applications and up to 100 million calls on its AI models across various business applications

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By 2025, an independent division focusing on intelligent development is set to emerge, driving further innovation and operational efficacy.

Addressing potential market pressures, An underscored the necessity for high-volume production to ensure survivabilityFor any luxury automotive group to remain competitive in the global market, an annual sales threshold of at least one million units is essentialThe merger of Zeekr and Lynk & Co. aims to establish a high-end luxury electric vehicle group capable of achieving this benchmark by 2026.

Regarding the financial viability, the Zeekr Technology Group is committed to a strategy of reducing R&D expenditures by at least 10% annuallyAn explained that the organizational restructuring and optimized resource allocation are already yielding benefits and that approximately 80% of operational adjustments have been successfully implementedThis commitment to efficiency is projected to significantly accelerate the timeline for profitability.

As they set their sights on international markets, especially in Europe, An highlighted the importance of a robust strategy anchored in both exports and local manufacturingThe foundation present within the group, particularly collaborations with established players like Volvo, would serve to enhance competitive advantages in the global market.

In emerging markets, a unified sales strategy is unfolding as they continue integrating Lynk & Co. and Zeekr operationsResources are mobilized to exceed the expectations for customer service and product accessThey plan to launch around 200 stores internationally this year while rolling out ambitious charging infrastructure in anticipation of expanding their market presence.

In summary, this pivotal merger represents Geely’s intent to solidify itself as a leader in the high-end electric vehicle market by streamlining operations, enhancing brand value, and ultimately accelerating its global footprintThe ambitions set forth by An and his team suggest a long-term vision aimed not only at sustaining competitiveness but at reshaping the future of luxury mobility in China and beyond.

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