China’s Geely Auto to slash excess capacity amid overhaul to boost carmaker’s global edge

Geely Auto, which is locked in a fierce battle for dominance against BYD in China’s crowded automotive market, has pledged to purge excess capacity through an asset restructuring while ramping up its go-global drive with an eye on greater international competitiveness.

Chairman Li Shufu said during the Chongqing Auto Show on Friday that the Hong Kong-listed carmaker would assess the oversupply of capacity across all units to determine whether to close, suspend, merge or sell redundant production facilities.

“Geely Auto is determined in its resolve to achieve sound corporate development by concentrating our superior resources on a vertically integrated automotive group,” he said in a video clip posted online. “By doing so, we will transform Geely into a strong and large carmaker with advantages in systemic development, corporate governance and global competitiveness.”

While Geely’s billionaire founder did not reveal specifics, such as the number of plants or the scale of excess capacity that could be disposed of amid the asset revamp, the move signals a strategic pivot for the Hangzhou-based manufacturer.

Geely operates a diverse stable of brands, including Zeekr, Lynk & Co, and Galaxy.

The company, which sells both petrol and electric vehicles (EVs), unseated EV assembler BYD as mainland China’s largest carmaker in the first quarter of this year, only to be eclipsed by the domestic rival in April and May as a global energy crisis spurred demand for fully electric vehicles.