Geely-Renault: Trojan Horse That Will Kill the European Automobile Industry?

Should Horse Powertrain Limited, the joint venture founded by Renault and Geely, be seen as a subliminal message of Europe’s invasion?

The bulldozer of Chinese automotive industry is underway. Full speed ahead. And the walls hastily erected by the European Union – under France’s directives – won’t change much. The United States, also aware of the issue, have decided to quadruple import tariffs, increasing from 25% to 100%!

Europe, once again, is much more timid because it relies on a very short-term policy of income creation that involved relocating everything to China in the 1980s to get cheap products. Today, the boomerang is hitting back hard. Closing economic borders would create very serious problems, and the imperialist China knows this and takes advantage.

Nevertheless, Chinese manufacturers face a problem: they won’t waste time shipping millions of electric cars on ships. It worked when volumes were limited, but not anymore. Toll at the EU border or not. So, they must rapidly build factories (mainly with the very opportunistic Hungarian partner) or form partnerships with other established manufacturers. The Trojan Horse is perfect.

A True Trojan Horse

A first step was taken with the co-creation of a company, Horse Powertrain Limited, owned 50% by Renault and Geely. Horse means Horse in French, a subliminal message? It will employ 19,000 people across China, South America… and Europe. But Europe, somewhat low-cost, includes Romania and Spain. Sweden, home to Volvo (owned by Geely), will also be one of the three European destinations. So, should we understand that France is excluded? Yes, very likely for political reasons and popular acceptance… for now.

This new joint venture, valued at 15 billion euros, will have 17 production plants to ensure perfect global coverage.

The trap is unfolding and will soon close around its prey… very likely including Renault, which will initially gain an advantage before being swallowed whole. Some might see this as destiny, by inevitability. Meanwhile, shareholders are happy.

Past: The Origins and Growth of Geely

Founded in 1986 by Li Shufu, Geely started as a refrigerator manufacturer before diversifying into motorcycle parts and later vehicles. In 1997, Geely produced its first car, entering the Chinese auto industry, dominated at the time by state-owned brands. Geely quickly gained ground with its strategy of producing economical vehicles for the rapidly growing Chinese market.

A major turning point occurred in 2010 when Geely acquired Volvo Cars from Ford for $1.8 billion. This acquisition not only allowed Geely to benefit from Volvo’s advanced technology and expertise but also boosted its credibility on the international stage. Other notable acquisitions include the British taxi brand London Electric Vehicle Company (LEVC) and a majority stake in Malaysian manufacturer Proton.

Present: A Global Player

Today, Geely has become a major player in the global automotive industry. The group owns several brands, including Geely Auto, Volvo, Lynk & Co, Proton, and Lotus. Each brand targets different market segments, from budget cars to luxury vehicles and sports cars.

The alliance with Renault is a recent, strategic development. In 2021, Geely and Renault announced a partnership to jointly develop and produce hybrid vehicles for the Asian market. This agreement allows Renault to leverage Geely’s established presence in China, while providing Geely access to Renault’s advanced hybrid and electric technologies. The collaboration also involves sharing resources and technological platforms to improve efficiency and reduce costs.

Future: Innovations and Expansions

G eely’s future appears promising with numerous innovative initiatives and ongoing expansion plans. The focus is on sustainable mobility, with massive investments in electric (EV) and hybrid vehicles. Geely has announced its intention to launch a series of new electric models under various brands, including Lynk & Co and Volvo, to meet the growing demand for eco-friendly transportation solutions.

Additionally, Geely is actively exploring autonomous driving technologies. The group has launched several pilot projects in China and Europe, in collaboration with leading tech companies. For example, Geely’s SEA (Sustainable Experience Architecture) platform, dedicated to electric vehicles, is designed to incorporate advanced autonomous driving technologies.

The partnership with Renault could also expand to include new markets and product segments. Both groups are exploring opportunities in connected and smart vehicle projects, leveraging Renault’s software expertise and Geely’s manufacturing capabilities.

Conclusion

Geely has come a long way from its modest beginnings. Thanks to strategic acquisitions and intelligent partnerships, the group has become a giant in the global auto industry. The alliance with Renault is a crucial step in pursuing its global ambitions. With a strong focus on green technologies and autonomous driving innovations, Geely is well-positioned to play a leading role in the future of mobility.