Geely

COMPANY PROFILE

2013

Geeley SA

Quality comes as standard

COMPANY REPORT

Quality comes as standard Editorial – Roland Douglas Production – Hal Hutchison

Geely is one of China’s top automotive brands. After failing to penetrate the South African market once before, the brand is back, with a new leader, looking to build its presence and make its name as a quality Chinese product. So far things are going very well…

South Africa’s automotive industry is one of the most important to the country’s economy. It is reported that automotive activities contribute at least 6% to the country’s GDP and account for almost 12% of South Africa’s manufacturing exports.

All of the world’s major auto manufacturers have a presence in South Africa and some are growing their activities every year. For example, BMW, General Motors, Ford and Volkswagen all have major production facilities in the country and they all take advantage of the industrial development zones that have been set up in close proximity to ports to aid export and distribution.

Because of South Africa’s and Africa’s reputation as a high growth, development region, auto-businesses are flocking to the continent. However, it is no secret that the ‘battle ground’ for the global auto industry is China.

According to KPMG’s 12th annual Global Automotive Executive Survey, Chinese automotive brands are expected to enjoy the greatest growth in the global

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market over the next five years.

The majority of the 200 senior executives from the world’s leading automotive companies who were interviewed (86%) believe China, the world’s biggest auto market, will continue to enjoy the greatest number of car sales and produce the most vehicles by 2015. China is also considered the biggest investment target.

This positive outlook has encouraged one of China’s top ten auto manufacturers, Geely, to push its international business and this has been felt strongly in South Africa.

Established as an independent firm in 1986, Geely launched its auto manufacturing business in 1997 in China and is today a fully integrated independent auto firm with a complete auto eco-system from design and research and development to production, distribution and servicing.

Henri Meistre is the Managing Director of Geely SA and he recently spoke to IndustrySA about quality, sales, expansion and safety.

GEELEY SA

“We have been importing and distributing cars in South Africa since 2011. There was previously a Geely presence here, they were here from 2007. Unfortunately, they fell upon hard times following the global meltdown and they stopped trading in late 2009.

“Geely are enormous in China and product from China is improving all the time. If you look at the early models from Geely, in 2007/2008, compare it to what we have now, the quality has improved vastly.

“There’s been a very real change in Geely’s approach to the global automotive market and they’ve adapted their strategy accordingly. They’ve carefully examined who they are and where they are.

They see themselves as a global and not just a Chinese company and they have a refreshing approach to global business.

South Africa is an important market to them. They see us as the gateway to the rest of Africa.”

VOLVO AND DSI The advancement of quality that has been evident in Chinese cars over the last few years has been developed because of a demand in the market. European, and today Japanese and Korean, brands have often been perceived as those which produce cars of the highest quality but Mr Meistre insists that Geely are upping their standards, thanks mainly to two major acquisitions.

“The Chinese realised they needed to be more

globally competitive and cater for differing international market tastes. Geely decided that they needed to improve quality, safety and efficiency so they approached Ford and bought Volvo.

“There is a now a share of information and technology between the two companies and this has helped Geely to improve safety stats greatly,” says Mr Meistre.

People are not always aware that as well as owning Volvo, Geely owns DSI (Drivetrain Systems International), the world’s second largest gearbox manufacturer, based in Australia. The acquisition was made in 2009 and reinforces the fact that Geely is actively seeking improvement. This will only help Geely’s global ambitions and will help with research and development too.

“Chinese cars have had a bad reputation with safety but we now have cars that have a 4 or 5 star Euro NCAP rating, not Chinese but Euro rating.

The Emgrand7 has phenomenal quality, a lot of spec and the 4 star Euro NCAP rating and will be launched here in early May. “The research department in China now has access to information which has helped them improve, information from Sweden and even from SA. We’re always feeding back the little bits that we can, to help tailor the product to our market,” says Mr Meistre.

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COMPANY REPORT

GEELEY SA

“There is a now a share of information and technology between the two companies and this has helped Geely to improve safety stats greatly”

BUILDING A PRESENCE The most popular model from Geely SA is the LC, a hatchback competing in one of Geely SA’s current primary markets – compact car.

The car has been in production since 2009 and comes in three different models; the GS, GL and GT, all with varying amounts of spec. It can cost anything from R80,000 through to R110,000 depending on model and content and the company has a broad network to serve owners and potential customers.

“We have over 40 dealerships across the country,” says Mr Meistre. “We offer 300,000km warranty, we are majority shareholders in an import parts business which has expertise in bringing parts in to our dealer network from China.”

The company is currently well placed in the South African market but still sits way behind the established brands. However, Mr Meistre is confident saying: “My prediction is that Geely will be the most successful Chinese automotive brand in South Africa in the medium to long term.”

While the brand is not there yet, they are most certainly building for the future. “We’ve got good momentum going at Geely South Africa,” says Mr Meistre.

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“We’re building up to a new product launch at almost six monthly intervals.

This is good. We need to add product. Initially we didn’t have a lot of product for our dealers to sell and service and this was a challenge to their viability. But we have a future and the future looks good.”

The company has stated its intention to open up different markets after initially entering South Africa in the small car sector. Opportunities have already been identified in the SUV (Sports Utility) and LCV (Light Commercial Vehicle) markets.

When he started out in his current position Mr Meistre said: “I like to take time to look at things carefully and what I see at Geely - the product, the quality, the calibre and commitment of the people - impresses me.”

Mr Meistre has vast experience working with Chinese and Korean brands in South Africa and his expertise will be needed to ensure that the Geely, the international brand from China, can become the local Chinese brand of choice for South African’s, all the time improving and all the time growing and with the opportunities already identified, it seems like there is no reason why the brand will not be the next big thing in the SA automotive industry.

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www.geelysa.co.za

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