Geely – the Chinese Skoda

Geely – the Chinese Skoda

Pictures of Geely cars can be seen here.

How do you double the price of a Skoda?
Fill up the tank.

Skoda were once the butt of many jokes. Back in the 1980s they were one of a number of Eastern Bloc cars sold in Western Europe. All were dirt cheap and had an appalling reputation largely because they were outdated and perceived to have poor quality.

Fast forward twenty odd years and Skoda cars often win awards and the JD Power’s studies have them outperforming Volkswagen in reliability. What happened to change this? Well it started in 1987 with the launch of the Skoda Favorit which incorporated licensed western technology and did a lot to close what had been around a 10 year lead of Western European manufacturers.

Then, with the political changes in Eastern Europe Volkswagen was brought in as a joint venture partner. From the initial agreement in 1991 where Volkswagen took 30% ownership the percentage was gradually increased until full ownership was obtained in 2000.

Geely were until a few years ago a joke. If their cars looked awkward, their English names were laughable. We were blessed with the Beauty Leopard sports car which probably had as much sporting pedigree as Garfield, and then the King Kong. When it came to the sub-brand Shanghai Maple, most of the cars were heavily based on the Citroen ZX, which was hardly cutting edge technology even when it was launched.

Had you asked me what I thought were the prospects for Geely I would have said that they were likely to be a second level producer after the inevitable consolidation of the Chinese car industry. What I mean is that I thought they would succeed with sales of cheap cars in China and some Third World countries but would never crack the Western market or get away from low end vehicles.

It would be easy to say that Geely’s future all changed with the purchase of Volvo. However, it started earlier. I claim that Geely’s ‘Favorit’ moment happened with the purchase of DSI. Yes, it could be argued that it began earlier with the Manganese Bronze Holdings joint venture, but producing London taxis was never going to help catapult Geely into the big league.

DSI (Drivetrain Systems International) is an Australian transmission manufacturer that Geely acquired in early 2009. This may sound an insignificant purchase, but when I visited Great Wall in Baoding a manager commented that the three biggest bottlenecks for Chinese manufacturers were safety, engines and gearboxes. Of these safety is probably the easiest to address. Engines and gearboxes need considerable investment and it has proved so far difficult for Chinese manufacturers to purchase off-the-peg cutting edge technology. One only need look at the prevalence of outdated Mitsubishi Sirius series engines in Chinese home grown offerings to see this.

With the purchase of DSI, Geely has access to world class automatic transmissions at a time when some JV companies are still content to offer cars with four speed automatics in China. So far the adoption of this technology in Geely cars has been slow which is probably due to DSI previously producing transmissions suitable for larger higher torque engines. However, now DSI gearboxes are beginning to trickle into the Geely range.

The Volvo purchase was Geely’s ‘Volkswagen’ moment. Theoretically this means Geely has access to a whole tranche of technologies. Volvo’s reputation is built on safety yet Chinese manufacturers’ record has often been publicly derided. The use of DSI technology in the Geely range has so far been slow but that from Volvo has been so far near non existent. Skoda built its newfound glory on the back of Volkswagen and for Geely to really succeed it needs to try to integrate some of what Volvo has to offer.

Two weeks ago I test drove the Emgrand EC7 for the UK’s Autocar magazine. Geely plans to start selling the car there at the beginning of next year. The EC7 is already unrecognisable from a Geely of a few years back. It is solidly built – receiving a 4 star Euro NCAP rating – and by the time it hits the UK will come with a DSI gearbox. Will it do better in Britain than MG? Well the EC7 is not a car that going to make a huge impact, its replacement however just might. In my previous post about MG failing in the UK I mentioned Daewoo. The person in charge of Geely’s UK launch, Matthew Cheyne, was instrumental in the early success of Daewoo in the market.

Cheyne is quoted as saying “Working together we and our dealers should be able to offer a better customer proposition for buying a new car. We intend to be different, more customer focussed and items such as the long warranty will be just part of an innovative total customer care package”. If like Daewoo they can strike a chord with the car buying public then Geely may prove to be a hit.

I don’t know if there is such thing as a Geely joke in Chinese. However, it seems that, like Skoda, in a few years time it will be Geely who are the ones laughing.

  1. Thanks for the information and insight. Geely is now becoming a good alternative for people who have needs that are not that high-standard. If you want a car just for everyday use, I mean , you do not transport tons of goods, you don’t drive to the wild, then Geely is an economical choice. This is an article I wrote recently about Geely’s history and future development strategies. http://daxueconsulting.com/geely-in-china/
    Hope you can read it and we may exchange ideas.

  2. Thank you. The link you gave seems to be dead.

Leave a Comment

*