Geely to produce small crossover utility vehicle for Chinese and European markets

Zhejiang Geely Automobile Group Co., Ltd. (Geely), based in Hangzhou, China, plans to produce a small crossover utility vehicle next year, the first car to be built using a common platform it jointly developed with Volvo Cars.

Reuters reported that the car could be in Chinese showrooms in early 2017 and in several European markets a year later and eventually in the United States.

The new car will be based on a common platform called Compact Modular Architecture (CMA) and engine technology that Geely developed with Sweden’s Volvo Cars, which the Chinese automaker bought from Ford Motor Co. five years ago.

Geely, which also owns black cab maker London Taxi Company, is building a new assembly plant in eastern China, which will eventually have the capacity to produce 150,000 CMA-based vehicles a year for both Geely and Volvo.

For export to Europe, the new plant’s CMA-based small crossover SUV will initially be an alternative-fuel version. In China, Geely plans to sell a gasoline-engine version from early 2017, followed by a couple of alternative fuel variants, such as plug-in hybrids.

In targeting Europe with an alternative-fuel model, Geely wants to be seen as a maker of affordable high-tech cars. Geely also plans a limited number of flagship showrooms in Europe, the report said.

In Europe, Geely plans to focus on Spain, Portugal, Italy, Britain and Eastern Europe, where consumers are more open to buying non-European branded cars, the report said.

Geely plans to unveil the CMA-based crossover at next year’s Geneva or Beijing auto.

In 2014, Chinese automobile production and sales reached 23,722,900 and 23,491,900 units respectively, up 7.3% and 6.9%, from the previous year.  However, Chinese brands continued to struggle as Chinese consumers increasingly preferred to buy foreign brands.  For four consecutive years, the market share of Chinese-branded passenger cars have continued to decline, according to statistics from the China Association of Automobile Manufacturers (CAAM).  Last year, sales of Chinese-branded cars were down 17.4%. In terms of market share, this represented a decline of 5.6 percentage points.

However, sales of Chinese-branded sport utility vehicles (SUV) grew in sales (50.4%) and market share (4.1 percentage points) last year.

Geely was China’s number eight best-selling passenger car brand in 2014.

Chinese auto exports also declined in 2014, by 6.9%, year-on-year to 910,400 units. Passenger car exports declined by 10.6% to 533,000 units, while commercial vehicles slightly dipped by 1% to 377,300 units.