Starting at 99800 yuan, does Geely want to sell cars at a loss?
Recently, Geely Automobile Group (hereinafter referred to as "Geely Automobile") released the latest model of the Galaxy series, Starship 7 EM-i, in Taizhou. The new car is positioned as a compact plug-in hybrid SUV, priced at 99800 to 132800 yuan. In terms of market positioning, the direct competitor of the Starship 7 EM-i is the BYD Shuangsong series, even including its own product Galaxy L7.
The starting price of 99800 yuan has brought mainstream compact plug-in hybrid SUVs within 100000 yuan for the first time. Previously, the highest selling BYD Song PLUS and Song PRO in this market had starting prices of 129800 yuan and 109800 yuan respectively, with monthly sales exceeding 20000 units for both cars.
The record breaking low price may once again trigger competition on the price side in this market. However, Gan Jiayue, CEO of Geely Automobile Group, stated in an interview with Time Finance and other media that Geely is reducing costs through technological innovation and specialized cooperation with suppliers to increase scale. Therefore, Geely only engages in a "value war" and does not engage in a "price war".
Ganjia Review: 99800 yuan is not a "price war"
The price is lower than similar models, but the configuration of the Starship 7 EM-i is not inferior.
The Starship 7 EM-i is built on the Geely GEA new energy exclusive architecture, with body dimensions of 4740mm in length, 1905mm in width, and 1685mm in height. The car is equipped with multiple new energy technologies, including the new generation Thor EM-i electric hybrid technology, E-DHT intelligent seamless 11 in 1 hybrid electric drive, and SHIELD short blade battery. The official claims that its engine has a thermal efficiency of 46.5%, the highest in the industry, with a fuel consumption of only 3.75L per 100 kilometers.
However, the compact car market is the largest segmented car market in China and also the most fiercely competitive segmented market.
As for the compact plug-in hybrid SUV represented by the Starship 7 EM-i, in addition to the BYD Song PLUS and Song PRO, which have consistently occupied the top two sales charts, multiple domestic brands have also launched their own models, such as the Changan UNI-Z and Fengshen L7. The first model of Geely Galaxy series, Galaxy L7, launched in February last year, is also a compact plug-in hybrid SUV.
Compared to the aforementioned models, the latest Starship 7 EM-i is priced lower. However, in Geely Automobile's view, this does not mean engaging in a "price war".
Geely has always adhered to market pricing, "said Fan Junyi, General Manager of Geely Automobile Sales Company, to Time Finance
Gan Jiayue summarized that Geely has always emphasized the need to engage in a "value war" rather than a "price war". Only by engaging in value wars can we truly improve our technological level and reduce costs through technological upgrades
In addition to reducing costs through technology, Ganjiayue also responded to the recent cost negotiations between car companies and suppliers in the industry, stating that Geely and its partners such as suppliers and dealers have a community of shared destiny. Collaboration with suppliers requires specialized large-scale production and socialized cooperation. Only when suppliers have a larger scale and stronger professional capabilities can they unleash their better technology and abilities
The launch of the new model has raised questions in the market about the product system of Geely Galaxy, with the most intuitive being the combination relationship between the Starship 7 EM-i and Galaxy L7. Fan Junyi stated that the Galaxy L7 is more sporty and performance oriented, while the Starship 7 EM-i is more in line with mainstream car demand.
In addition, the sales network of Geely Galaxy currently consists of two parts. Galaxy One Network is responsible for the sales of Galaxy L7, while Galaxy Two Network is responsible for the sales of Starship 7 EM-i. With the addition of the Galaxy L7 and the Starship 7 EM-i, we aim to create a 'hybrid SUV twin star' and also hope to achieve a 1+1 greater than 2 effect, "said Fan Junyi.
Returning to Taizhou, Geely is restructuring
Returning to Taizhou to release the Starship 7 EM-i has certain representative significance. This car is the first model launched by the New Galaxy series, which originated from the "Taizhou Declaration" of Geely Holding Group (parent company of Geely Automobile Group).
In September of this year, the entire management team of Geely Holding Group returned to Geely's first factory - Taizhou Linhai Base, during which they drafted the "Taizhou Declaration". Through this declaration, Geely Holding Group aims to strengthen strategic focus, integration, and collaboration within the group.
Against this backdrop, in the fourth quarter of this year, multiple brands under Geely Holding Group underwent major integration, including the integration of the Geometry brand into the Geely Galaxy series in October and the establishment of the Jike Technology Group with Lynk&Co in December. Among them, Geely New Energy will focus on creating the Galaxy series, and Geometry will become the intelligent boutique car series of Galaxy.
Gan Jiayue stated that the merger of Geometry and Galaxy is a reflection of the group's strategic focus and also aimed at improving organizational efficiency. The dealer network of Geometry can quickly upgrade and support Galaxy products, and the technology of the Galaxy series can also be shared with Geometry's models. Two brands can have a lot of synergy in their networks, distributors, technology systems, and supply chains, which is beneficial for both brands to bring more value
Similarly, the person in charge of Jike stated to Time Finance that after the merger and establishment of Jike Technology Group, Jike and Lynk&Co will operate independently as dual brands and launch products for different segmented markets. But within the group, there will be more collaboration and sharing between the two brands in the middle and back office to avoid homogeneous competition and resource consumption within the group.
In terms of market performance, Geely Galaxy and Jike are also the fastest-growing product series (or brands) under Geely. In the first 11 months of this year, the cumulative sales of the two were 425000 and 195000 respectively, an increase of 74% and 85% year-on-year.
Both have also driven the overall growth of Geely Holding Group's automobile sales. During the same period, Geely Holding sold a total of 1.967 million cars, a year-on-year increase of 31%. Not only that, Geely Holding Group has also achieved the annual sales target of 1.9 million vehicles set at the beginning of the year ahead of schedule, making it one of the few leading car companies to achieve the target so far.
After the integration of multiple brands under its umbrella, Geely Holding's future development goals may become even more ambitious. Jike has stated to Time Finance that its annual sales target for 2026 is to exceed 1 million vehicles. The sales network of Geely Galaxy series is also accelerating its expansion, and next year it will expand to fourth tier, fifth tier, and even county-level cities.
The plan for next year's Geely Galaxy is very clear - there are currently no segmented markets for product layout, and corresponding products will be launched. "Gan Jiayue said," So next year, the Galaxy series will have at least four new products, including two SUVs and two sedans