Geely Auto And The Chinese Auto Making Industry

There are roughly 13 Chinese auto makers in China. Geely is one of the very few entirely Chinese. Most other Chinese auto makers are joint venture with foreign company. Shanghai General Motor (Buick) and FAW Volkswagen are such examples. Chinese joint venture allows foreign auto makers to tap into the China auto market and provide the latest technology, capital source to company and has been successful in capturing huge market shares amid fierce competitions.

As you can see from the chart, Geely is the only non joint venture auto maker. With only less than 5% market share, half of Shanghai GM (Buick). On the road of Chinese big cities one can see a lot of nicer looking Buick car as oppose to Geely. The Buick is much prettier and sophisticated whereas the Geely tries to look sophisticated. However the Geely cost a third of the Buick.

Shanghai GM Buick

Geely Vision

Geely has traditionally focused on the lower end of the market made affordable to the public. A Geely Maple coasted less than RMB40, 000. I have seen many Geely Maple use as Taxi in small town and village.

Since mid 2005, state own companies gone public and the Chinese economy took off. People got much richer from the stock market and the property market. The sales of these cheap Geely Maple drop dramatically. All in a sudden the Chinese can afford the nicer looking Buick. Geely had to make a sharp turn toward the richer market. King Kong and Vision are Geely’s attempt to recapture market shares in China.

The above is a Geely Vision being sold in China Nanning’s Wal-mart. It cost RMB69, 800. 138 horse power, 16 valves, 1.8L. At a closer look, the craftsmanship is not there. Personally I prefer a more powerful car and the Buick is definitely more sophisticated. However if I am an ordinary Chinese buyer I would think this is a much cheaper car because the Buick is selling at above RMB200, 000. This car will do the job. But then ordinary Chinese in China has just recently got the taste of money and would probably want to go for the best regardless affordability.