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  1. Analysis
March 15, 2017

ANALYSIS – Why Geely should sell 1m+ cars in 2017

The first of three features looking at the future models of Zhejiang Geely/Geely Auto was published recently. Now comes an examination of what's ahead for Geely Emgrand, one of the fastest expanding car brands in China right now. The final feature will concentrate on Volvo Car Corporation.

The first of three features looking at the future models of Zhejiang Geely/Geely Auto was published recently. Now comes an examination of what’s ahead for Geely Emgrand, one of the most fastest expanding car brands in China right now. The final feature will concentrate on Volvo Car Corporation.

No future for ICE models? Or a big future?

Until relatively recently, trying to fathom what Geely was up to with its multiple brands and seemingly endless array of models had not been an easy task. Now, the company seems to be on a successful path, having culled failed brands and many vehicles. 

The plan is supposed to be for Geely to phase out all models powered by an internal combustion engine (ICE), replacing such vehicles with EVs and PHEVs. Will that happen? Having made this public declaration to the media in November 2015, the company has now gone quiet on that front. That could well have a lot to do with just how successful many of its newer petrol-powered cars and SUVs are rapidly becoming.

Geely is either hedging its bets, or else planning to forget its statement about doing away with ICE models by 2020: a recently announced JV plant with Volvo to manufacture 1.5-litre aluminium engines is set to open in June 2019. The foundation stone for this factory in the Baiyun district of Guiyang, a city in China’s southwest, was laid in February.

This year: sales to rise by 32%

The company stated earlier this month that it hopes to see a 32 per cent year-on-year combined gain for its Geely and Geely Emgrand brands, equating to an even one million vehicles. As exports remain relatively small scale, almost all of those deliveries will be in the Chinese market.

How realistic are the privately owned firm’s plans? Well, home market registrations were up by 105 per cent for the calendar year to the end of February, reaching 191,629 vehicles, led by the Emgrand 7 sedan, also known as the EC7. 

Last year, the Geely and Geely Emgrand model ranges were culled of some outdated vehicles (Freedom Ship, EC8, SC7) and then expanded to a total of eleven models. 

Later in 2017 there will be both replacements from some older vehicles, plus a couple of additional models. Combine that with how strong sales were in January-February, and the one million mark starts to look like it will be easily overshot, barring any sudden Chinese market downturn.

One of the most astonishing things about the company’s performance is that it does not have any vehicles in the MPV segments (a Wuling compact minivan was yet again China’s biggest seller in 2016), preferring to concentrate on sedans, hatchbacks and of course crossover-SUVs.

Sales double, profits too

All of this success, which continues from 2016, saw Geely Automobile Holdings doubling net profit to Yuan4.5bn from 2.26bn in CY2015. Vehicles deliveries, excluding Volvo Cars, also shot up by 50 per cent, reaching 765,851 cars and SUVs. Much of the reason was the launch of fresh products.

Three of last year’s most successful new vehicles were crossovers or SUVs, namely the Emgrand Boyue, Emgrand GS and Geely X6 Vision, supported by the new Emgrand GS, a compact sedan. 

According to CPCA data, sales of all models in CY2016 were as follows :

  • Geely Emgrand 7/EC7 sedan & hatchback: 223,781
  • Geely GC7 Vision sedan: 137,687
  • Geely Emgrand Boyue SUV: 109,209
  • Geely MK King Kong sedan: 63,413
  • Geely Emgrand GS SUV: 60,521
  • Geely Emgrand Borui/GC9 sedan: 51,828
  • Geely Emgrand X6 Vision SUV: 49,447
  • Geely Emgrand GL sedan: 30,037
  • Geely Emgrand EV sedan: 17,181
  • Geely Emgrand GX7 SUV: 15,298
  • Geely GX2 Panda: 7,178

A segment/City car

The Panda small car was a concept at the Beijing motor show in April 2008. Build at a plant in Ningbo (Zhejiang province) started in September 2008. The car uses Geely’s CE platform.

Geely used the Panda to launch its ‘Gleagle’ (Global Eagle) sub-brand. The Gleagle GX2, a higher-riding mock-SUV derivative in the style of the Fiat Panda Cross, debuted at the Guangzhou motor show in December 2010. The GX2 was sold in modified form in the Taiwanese market as the Tobe W’ Car. It was also sold in some export markets (Chile in one example) as the Geely LC Cross.

The GX2 was one of several models which Geely’s partner Nordex S.A. assembled in Uruguay. Exports to Brazil commenced in September 2013.

The former Gleagle GX2 became the Geely GX2 Panda during 2014. A replacement model is overdue but not expected until 2018. The company obviously has many other projects in the pipeline, including the launch of Lynk & Co, and additional SUVs for Geely Emgrand.

B segment/Sub-compact

In the segment above where the Panda GX2 competes, Geely also has just the one model. The MK, also known as the King Kong, is a small four-door sedan. It was launched in China in 2006. There is also a five-door hatchback bodystyle, the MK2.

The replacement sedan and hatchback are now well overdue. Each should appear during the second half of this year. They may become Geely Emgrand models. Expect the CE platform to again be used, albeit in updated form. Production should be at the Ningbo plant.

C segment/Compact

The GC7, also known as the New Vision, is a 4,590mm long four-door sedan. It premiered as a prototype at the Beijing motor show in April 2010. The Chinese market launch was in December 2011. Both 1.5- and 1.8-litre ‘G-Power’ branded engines were originally available. 

With the phasing out of the Gleagle, Emgrand and Enlgon brands in early 2014, the original Gleagle GC7 changed names to Geely GC7. The restyled car premiered at the Guangzhou motor show in November 2014. It is sold in certain markets as the Geely GC7, but in China, it’s the Geely New Vision. As well as the facelift, there were new 1.3-litre turbo and 1.5-litre normally aspirated engines.

The GC7’s successor is likely to use Volvo and Geely’s CMA architecture. It is due for release in the Chinese market during the fourth quarter though it may not appear until early 2018. The company will be expecting big things from the successor model, given how well the current car performs in the market despite its age. Annual production of 200,000 units will be the likely target. 

Another compact model series is the even more successful Geely Emgrand 7. Geely began the launch of this sedan and five-door hatchback range in China in September 2009. Each bodystyle had its world premiere at the Shanghai motor show in April 2009. The model names were originally Emgrand EC7 and EC7-RV but in 2014, these changed to Geely Emgrand 7 (Chinese name: Xindihao) and 7 (RV).

The EC7 series cars were the first models for Emgrand, a now former brand. The cars were badged according to engine size: EC715, EC718, EC715-RV and EC718-RV.

The EC7 was launched in Turkey, one of the first export markets, in June 2010. This car was also due to be the launch model for the Geely brand’s arrival in the UK in December 2012. The local importer, Geely-owned Manganese Bronze (i.e. the maker of black taxis) had been planning to go against the parent firm’s strategy by selling the car as a Geely. The UK model was to be badged as the Geely Emgrand EC7, not the Emgrand EC7 as it was in China. Plans changed and neither the brand nor the car will now be launched in the UK.

Geely revealed a facelifted EC7 at the Chengdu motor show in September 2011. There was a further update in October 2012 when the cars gained daytime running lights.

The EC7 was launched in Russia in June 2012 as the Geely Emgrand.

In October 2012, the first EC7s from a new joint venture between Geely and Egyptian auto dealer GB Auto began rolling off an assembly line in Cairo. The partners said the plant could assemble as many as 30,000 cars a year. GB Auto would distribute the vehicles in Egypt, Iraq, Jordan, Syria and Algeria, according to Geely.

These cars are also among the models which Geely’s partner Nordex S.A. assembles in Uruguay. Exports to Brazil commenced in September 2013.

The Emgrand EC7 was launched in South Africa in May 2013. As the Gleagle, Emgrand and Englon brands have been phased out in China, the EC7 and EC7-RV had been expected to be changed to the Geely Emgrand brand. This then happened in July 2014 and facelifted, renamed cars were launched at that time.

The replacements for the 7 sedan and the 7 RV hatchback will likely be released in 2018 and each should use Geely and Volvo’s new Compact Modular Architecture, the same set of modules as will underpin the future Volvo XC40 and other vehicles.

E segment/Large

A second prototype of a proposed rival for the Hyundai Equus was revealed at the Beijing motor show in April 2010. This followed the debut of an earlier concept, also named ‘GE’ (but badged as a Geely, not an Emgrand) at the Shanghai motor show in April 2009.

Unlike the Geely GE concept, which had a single ‘throne’ in the passenger compartment, the Emgrand GE concept had two rear seats. A production model had been originally thought likely to be launched in China during 2013.

The car at the Beijing show in April 2010 was claimed to have a 2.4-litre four-cylinder gasoline engine that acted as a back-up for an electric motor. There was then a change of thinking over this project. This followed the appearance of a new luxury car concept, the KC, which carried Emgrand badges, at April 2013’s Shanghai motor show. 

The KC, which had fastback styling (like the Audi A7) had a 2,880mm wheelbase and is thought to have used Volvo Cars’ SPA platform. The Geely GC9, the production version of the KC, was revealed at a media event in November 2014.

Prototypes of the GC9 were seen in Melbourne during early 2014 at Premcar’s engineering centre: this is the former Prodrive Australia. In China, engine choice is between 1.8-litre turbo and 2.4-litre four-cylinder units and a 3.5-litre V6. The six speed automatic gearbox is sourced from Australian supplier Drivetrain Systems International (DSI), which is part of Geely Holding Group.

There was a last minute change to the car’s name. Set to be called GC9, it suddenly became the Borui or Bo Rui as it went on sale in China during the first quarter of 2015. This sedan which is called GC9 in some export markets, is said to share much with the Volvo S60L.

The Borui is built by Geely subsidiary Zhejiang Jirun at its plant in the eastern coastal city of Ningbo. This was after Zhejiang Jirun Automobile Company bought Zhejiang Jirun Chunxiao Automobile Components Company from Zhejiang Geely Automobile Company in February 2015.

Despite having entered production in January 2015, there was a minor facelift for the Borui in late 2016. There should be a more substantial update in late 2018, ahead of a replacement in 2022. The Borui should at that point switch from the Ford-based EUCD platform to Geely-Volvo’s SPA. 

Crossovers & SUVs

Soon, the Geely Emgrand brand will enter China’s B-SUV segment. The model in question, pictured above, was developed with the V01 codename. The world premiere of the X1 will be at April 2017’s Shanghai motor show. It is due to go on sale in China from the second half of the year. The car at AutoShanghai is expected to be badged Yuanjing (‘Vision’) X1.

One segment above the X1, the 4.4m long Geely Emgrand GS is still building sales momentum. After a strong first six months on the Chinese market in 2016, it would not be surprising if deliveries for this year rose to around the 150,000 vehicles mark.

The first concept version of what became the GS appeared at the Beijing motor show in April 2012. A further concept, the Emgrand Cross, premiered at the Beijing motor show in April 2014. The production model might, at a later date, gain the same PHEV powertrain as the Cross: a 65kW 1.0-litre petrol engine and a 40kW electric motor.

The GS is a model in the style of the Volvo V40 Cross Country, i.e. not a true SUV but rather a tall hatchback with raised suspension. Like the GL sedan which it is manufactured alongside, it is based on FE. There should be a facelift in 2020 and a replacement in 2023. 

An older, less successful SUV is the Geely Emgrand GX7. This model started life as part of the low-priced Gleagle brand. It was revealed as the Gleagle GX718 prototype at the Shanghai motor show in April 2009. 

Built at a plant in Chengdu, the production version of the GX718 had its debut at the Guangzhou motor show in November 2011, going on sale in China five months later. The engine range consists of 1.8- and 2.0-litre gasoline units as well as a 2.0-litre diesel. The last of these is mostly for export markets.

The Gleagle GX7, Emgrand EX7 and Englon SX7 were all versions of the same basic vehicle. With the discontinuation of the Gleagle, Englon and Emgrand brands which began in March 2014, the GX7 became both a Geely and a Geely Emgrand. The two models are now the Geely Emgrand GX7 and the Geely Vision X6.

The X6 is far more successful than the GX7. Despite that, sources indicate that the Geely model will be phased out, leaving only the Geely Emgrand GX7. This may happen as soon as the fourth quarter of 2017, at which time the GX7 would be facelifted. After that, the latter would be manufactured for a further three years. Expect a CMA-based replacement in late 2020.

A vehicle which started life as the NL-3 project was launched in the first quarter of 2016 as the Geely Emgrand Bo Yue. This 4,520mm long SUV is built at the Chunxiao (Ningbo) and Baoji plants. 

After a slow ramp up, sales really began to take off from the second half of 2016. Moreover, in February, deliveries totalled 20,147 units, compared to 109,209 for all of 2016. Like other crossovers and SUVs, the Bo Yue uses the FE architecture. There should be a facelift in 2019, and then a change to a CMA-based replacement in 2023

EVs & PHEVs

The Geely Emgrand EV was one of the surprise successes of 2016, as its sales numbers above. The more than 17,000 cars which were registered stand in contrast to the 1,023 units of the Volvo S60L PHEV, though of course the latter sedan is far more expensive car.

The EV is a 4,631mm long plug-in version of the Geely Emgrand EC7. It premiered in concept form at the Shanghai motor show in April 2013. Geely said it would collaborate with Detroit Electric to develop the car.

Geely stated at the Shanghai show that the EC7-EV would be co-branded with a ‘Detroit Electric – Technology’ badge and that sales were expected to commence in the first quarter of 2014. The vehicle would initially be sold primarily to business users and public-sector organisations, and the two companies were forecasting sales of “around 3,000 units in the first 12 months, rising to to 30,000 in three years’ time”.

The EC7-EV production model would, the partners claimed, offer both medium-range (with a driving range of 165km per charge) and long-range options (an approximate range of 258km per charge).

Launching this model is in keeping with Geely’s November 2015 media statement that it intends to phase out its conventional petrol engines between 2016 and 2020, replacing them with hybrids, EVs and PHEVs. The car changed names for its production debut, being revealed at November 2015’s Guangzhou motor show as the Geely Emgrand EV.

This EV looks a lot like the EC7 but that car’s four-cylinder petrol engine is replaced by a 127hp electric motor which produces 184 pound-feet of torque. Energy is storied in a 44.8kWh battery pack. Geely claims the EV can travel at 37 miles per hour for up to 205 miles before needing to recharge. The varied speeds range is 157 miles. Expect a facelift for this model in 2019 and a replacement, to be based on CMA, in 2022.

The final sedan in the C segment is the Geely Emgrand GL. This is closely related to the GS, a 4.4m long hatchback/SUV mash-up (see below). The GL was revealed to the media in June 2016 and went on sale in China three months later. 

The platform used for the GL is called FE, which stands for Framework Extendable. This front-wheel drive sedan should be facelifted in 2020 and replaced by a CMA model in 2023.

Summary

As the Geely model range is would down, so the number of Geely Emgrand vehicles is expected to keep on rising. The obvious hole in the D sedan/hatchback segment may be plugged by an additional model to support the best selling 7 sedan, giving buyers a car to trade up to, should they not want an SUV.

Expect a lot more integration of architectures, plants and technologies not only between Geely Emgrand and Volvo Cars, but also with future Lynk & Co vehicles. In theory, that should lead to ever more efficiencies and better margins. 

The remainder of 2017 will be a true test of the strategy laid out for the China-based brands of Geely Automotive. As long as the group sticks to its small number of divisions/brands and keeps adding models in the most profitable segments, the future looks bright. Should the Chinese market continue to expand year-on-year, perhaps even two million vehicles a year might be possible by the end of 2020.

Future model plan reports for other manufacturers can be viewed in the OEM product strategy summaries section of just-auto.com.

Future product program intelligence

More data on vehicle lifetime and future product plans is available in PLDB from QUBE.

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