The Zhejiang Geely Holding Group – more commonly referred to as Geely – is relatively young in the global auto industry, having been established in 1986. Yet over the past decade, it has acquired several well-known international automotive brands and formed alliances or partnerships with others. Its business today spans the automotive value chain, from research, development and design to production, sales and servicing.
The latest partnership announced today is with Renault SA where a 50-50 joint venture will be formed for producing petrol engines and developing hybrid technology that will be used by each company’s brands, and possibly supplied to others.
The DRB-HICOM Group – via its subsidiary, Edaran Otomobil Nasional Berhad (EON) – is venturing into aftersales services with the establishment of a joint venture with Petromin Express, a subsidiary of Saudi Arabia’s Petromin Corporation. Petromin Express is the world’s fifth largest fast-fit service brand and operates in the Middle East, Africa and is looking to new markets in Asia.
The joint-venture company, which will be 51:49 shared between Petromin and EON, is expected to commence pilot operations of the business in January 2023, with 4 outlets during the 18-month pilot run. The pilot will enable management to derive a longer strategic roadmap for the business including capital requirements for expansion.
A Petromin Express service centre in Jeddah, Saudi Arabia.
Growing sector in auto industry DRB-HICOM’s move into the automotive aftersales market in Malaysia is timely as this is a large and growing area of business, especially with the population of vehicles in use. In 2021, this sector generated revenue of approximately RM42 billion.
Modelled after Petromin’s highly successful Petromin Express outlets in Saudi Arabia, the new company aims to offer Malaysian vehicle owners a unique experience of fast-fit aftersales services with a quick turnaround time.
While the services will be offered to all vehicles, the company will be targeting vehicles aged between 5 and 10 years which no longer have warranties in effect. Such vehicles will no longer be restricted by warranty conditions and can therefore be serviced by any other company.
Kalyana Sundaram Sivagnanam, Petromin’s Group CEO (left) and Akkbar Danial, CEO of EON (right) signing the joint-venture agreement, witnessed by Dato’ Sri Syed Faisal, DRB-HICOM Group Managing Director, Dato’ Sri Syed Faisal Albar.
Complementary new business The collaboration complements DRB-HICOM’s existing and extensive automotive value chain. The group is already involved in automotive manufacturing via Proton, retails several foreign automotive brands under the EON umbrella, and also offers mandatory inspection services via PUSPAKOM.
“Petromin’s collaboration with DRB-HICOM will allow it entry into the lucrative Malaysian aftersales servicing market by partnering with Petromin Express, a well-established and trusted corporate brand in the automotive sector. Their vast know-how and operational expertise, coupled with DRB-HICOM’s market intelligence and extensive customer reach, will create an ideal synergy that will propel this partnership to great heights. At the same time, we are very excited to be offering a new, affordable and convenient service to Malaysians,” said DRB-HICOM Group Managing Director, Dato’ Sri Syed Faisal Albar.
Petromin’s businesses Besides its Petromin Express business with over 700 outlets across Saudi Arabia, Petromin has a substantial lubricants business with products exported to over 35 countries. It also operates operates petrol service stations and distributes Nissan vehicles in the Kingdom.
Commenting on the new partnership, Petromin’s Group CEO, Kalyana Sivagnanam, said: “After decades of transforming the mobility solutions landscape in the Middle East and North Africa region, Petromin is looking forward to helping in transforming and pioneering the aftersales service experience for the discerning customers in Malaysia and around the globe. We are optimistic that this relationship will yield significant impact on the market in the face of game-changing technological, economic, and societal trends.”
Since being established 73 years ago, Honda Motor has been able to remain independent instead of becoming part of a bigger group. On its own, it has been able to successfully manage its business and endure even the most challenging periods without having to surrender its independence. However, the 21st century sees the auto industry changing and with the move towards electric vehicles (EVs), the cost of developing entirely new technologies is very high. In April, Honda became the first Japanese automaker to declare its intention will stop selling combustion-engines vehicles by 2040.
So even though Honda has preferred to be a ‘lone ranger’, it has been forming strategic alliances with some companies in the area of EVs because it is crucial to remain competitive in the new field, and sharing resources is more realistic. Honda has already agreed with General Motors to jointly develop two all-new EVs for Honda’s range, based on GM’s global EV platform. The EVs will be manufactured at GM plants in North America with sales expected to begin in 2024 for that market.
New joint-venture company
On another front, Honda will be working with Sony Group Corporation to develop EVs as well. The two companies have signed a Memorandum of Understanding (MoU) that outlines their intent to form a joint venture company through which they plan to engage in the joint development and sales of high value-added battery electric vehicles (BEVs) and commercialize them in conjunction with providing mobility services. The new company is expected to be established before the end of this year.
The Honda e, a fully electric EV model, is already on sale in Europe.
This alliance aims to bring together Honda’s mobility development capabilities, vehicle body manufacturing technology and aftersales service management experience, while Sony has expertise in the development and application of imaging, sensing, telecommunication, network, and entertainment technologies.
Sony has already developed EVs
Honda has already developed a few EV models for sale, with the Honda e having received a good response in Europe. Sony has also been developing its own EVs, with two prototypes displayed earlier this year at CES 2022 in Las Vegas. The prototypes appear to have reached quite an advanced stage and have been shown in real-world road-testing.
Sony’s two EVs which were shown at CES 2022 earlier this year.
While Sony announced in January that it would start a new unit called Sony Mobility which would handle commercialization of EVs, this move may well have been too challenging for the company which does not have experience in making cars. Honda, on the other hand, has been producing many fine cars with its decades of experience. As Sony would have vast experience in electronics, which are dominant in EVs, its expertise will be very useful.
So it remains to be seen whether Honda will adopt Sony’s concepts – called VISION-S – or come out with a new design. If they want to do a new design, they have less than 3 years to do so as the plan is to start sales of the first model from the new company in 2025.
A new brand name?
There is also a possibility that the new EVs will have separate branding rather than be sold as Honda or Sony products. This is because the agreement is for the new company ‘to plan, design, develop, and sell the EVs’. It is agreed that Honda will be responsible for manufacturing the first EV model at its own factory.
Honda has had many decades of experience manufacturing cars. not only in Japan but also in other countries.
“The New Company will aim to stand at the forefront of innovation, evolution, and expansion of mobility around the world, by taking a broad and ambitious approach to creating value that exceeds the expectations and imagination of customers. We will do so by leveraging Honda’s cutting-edge technology and know-how in relation to the environment and safety, while aligning the technological assets of both companies. Although Sony and Honda are companies that share many historical and cultural similarities, our areas of technological expertise are very different. Therefore, I believe this alliance which brings together the strengths of our two companies offers great possibilities for the future of mobility,” said Toshihiro Mibe, Director, President, Representative Executive Officer & CEO of Honda Motor.
‘Kei’ cars are vehicles in a category that was created in 1949 in Japan. The regulations limit their dimensions to a very small size, suited for the narrow roads of the country’s cities but also permitted for use on highways. They are very small – no more than 3.4 metres in length, 1.48 metres in width, and 2 metres in height – and even their engine sizes are limited to 660 cc (in Japan).
Having small engines, kei cars have obviously been very economical and as a segment, the amount of pollution from such vehicles would be lower than the other segments too. Due to the fuel efficiency of kei cars, the need to electrify them has not been as urgent as for larger cars but electrification is necessary in coming years.
To prepare for this new era, Nissan Motor has been having a joint project with Mitsubishi Motors Corporation (MMC) through an existing 50/50 joint venture known as NMKV Co., Ltd. It’s not known what ‘NMKV’ stands for though it could be ‘Nissan Mitsubishi Kei Vehicles’. The company handles product planning and project management for minivehicles sold in the Japan market.
The NMKV Model
NMKV uses its unique ‘NMKV Model’ to create highly competitive products while dispersing risks of development costs. The source of the NMKV Model is the value-creation abilities through organically combining the resources, technology, and expertise of the two parent companies.
The NMKV model
Expertise in electric vehicles and kei cars
Nissan Motor and MMC each have their own strategies for kei cars. One aims to display a significant presence as an automobile company in the segment while the other wants to fully utilize the high level of development capability of such vehicles that it has built up to this point. With NMKV, corporate lines can be crossed to share the automobile development expertise that has accumulated inside each company.
MMC, for example, has built up expertise in electric kei cars, having introduced the first one in Japan in 2009. This was the i-MiEV and it was also the world’s first mass-produced electric car. Nissan too has a long history of making electric cars, with its corporate history including an electric model known as the TAMA which was produced way back in 1947.
Although the LEAF, introduced 10 years ago, put Nissan in a very prominent position in the EV segment, its corporate history includes an electric vehicle called the TAMA which was produced in 1947.
Mitsubishi i-MiEV was the world’s first mass-produced electric car. Some units were also available in Malaysia during the period when the government exempted EVs and hybrids from all import taxes.
“We are a highly unique company of a type never before seen in Japan. We inherit the genes of both companies, and fuse together the experience and knowledge that both have cultivated. Our mission is to serve as a catalyst for both companies to make ‘1 + 1 = 3’, or even ’1 + 1 = 5’, and accomplish things that were not possible for the companies to accomplish individually in the past,” said Junichi Endo, President & CEO of NMKV.
New electric minivehicle in 2022
NMKV is developing a new electric minivehicle to be launched by Nissan in the second quarter of 2022 which is said to redefine the popular car category in Japan (it accounts for about 30% of new vehicle sales). With a nominal battery capacity of 20 kWh, it will have strong acceleration with smooth driving and cabin quietness that are key characteristics of electric vehicles. It will be available with a variety of advanced technologies, including driver assistance technologies.
Nissan iMK concept shown at the Tokyo Motorshow in 2019 could provide ideas for the new electric minivehicle.
The range will be sufficient to cover daily usage in Japan and in any case, the charging network in the country is already quite extensive. In addition to its mobility uses, the vehicle will be able to provide electricity from its battery to a home and, in emergencies, act as a mobile power source.
At 3395 mm long, 1475 mm wide, and 1655 mm high, the minivehicle would qualify for kei car incentives and the purchase prices are forecast to start at approximately 2 million yen (about RM76,400).
To locate a showroom to view or purchase the latest Nissan LEAF EV in Malaysia, visit www.nissan.com.my.
The S9 PHEV (plug-in hybrid electric vehicle) hypercar which was first presented as a concept at the 2019 Frankfurt Motor Show is making steady progress towards production. The last time it made the news was in April this year when a production-ready model was shown at Auto Shanghai 2021 and orders were being taken.
Pricing starts from 1.5 million euros (about RM7.453 million) and at that price, Silk-FAW would not be looking at high volumes. It is believed that the production run will be limited to 99 units, so it will be a ‘halo car’ for the rest of the Hongqi range which will have many new fully electric models.
Styled by ex-Volkswagen designer
The S9 began life as a project for the Hongqi premium brand of FAW (First Auto Works, a state-owned carmaker in China). The original design was done by Walter de Silva, formerly design head at the Volkswagen Group whose work includes many Volkswagen, SEAT and Audi models, including the R8. He is credited with being the man who introduced the Singleframe grille design which has been used on Audis since 2004.
In February this year, FAW signed a joint venture with Silk EV, an Italian engineering company, to develop a series of ultra-luxury, high-performance, new energy sports vehicles for the China and global markets. This moved the S9 to Silk-FAW which will bring it to the market by 2023.
To be built in Italy
With an investment of 1 billion euros, the S9 (as well as another model) will be further developed and manufactured in Regione Emilia-Romagna, the heart of Italy’s ‘Motor Valley’, where Silk EV has its headquarters. As development of the Hongqi ‘S’ Series line-up continues, production will be carried out in Italy as well as Changchun, where FAW’s headquarters is located in China.
1,400 bhp with top speed over 400 km/h
Silk-FAW will display the production version of the S9 at the Milan Design Week in early September. It has been confirmed that the hypercar will have a hybrid powertrain consisting of a 4-litre V8 petrol engine with electric turbocharging, and two electric motors. Total system output is expected to be in the region of 1,400 bhp, with 880 bhp coming from the engine. A top speed of over 400 km/h is expected with acceleration from 0 to 100 km/h targeted to be 1.9 seconds.
Other technical and design elements are not being revealed yet but as the pictures show, it has a long-tail design with a spaceframe underneath. Aerodynamic efficiency will obviously be superior and besides a variable geometry spoiler, there will be innovative carbonfibre air intakes, seamlessly integrated into each headlight, to bring cooling air to the engine. Air extraction will be via the rear light units.
Huawei, a manufacturer well known for its smartphones and portable electronic devices, is teaming up with the GAC Group to develop a smart SUV. While this will be the first jointly developed product, the two companies already have had a strategic cooperation agreement signed in 2017. This is for working together in the fields of intelligent connected electric vehicle technology.
Additionally, in September 2020, the two companies signed an agreement to further deepen cooperation, with a focus on computing and communication architecture in accordance with the development trend towards software-heavy vehicles.
This latest strategic cooperation will see a new generation of intelligent vehicles (likely to be up to 8 models) and digital platforms. The smart SUV, to enter the market by the end of 2023, and multiple other future models will utilize GAC’s GEP.30 chassis platform and Huawei’s CCA (Computing and Communication Architecture), as well as carrying Huawei’s full stack of intelligent vehicle solutions.
Initial development has commenced on the model which will be a medium to large fully electric SUV. The company says it will be ‘futuristic, powerful and efficient, with Level 4 autonomous capability’. The new model will be part of GAC’s entirely electrified line-up of vehicles by 2025.
GAC not only has R&D centres in America but has also displayed its models and concept cars at the North American International Auto Show in Detroit.
A fully electric GAC model.
Over the last few years, GAC has been successful in its vehicle electrification program as well as various areas of new energy technology, essential for the market in China. The GAC Group has established R&D centres around the world and has allocated billions of yuan in funding.
The joint venture between GAC and Huawei is timely as the global market for electric vehicles is growing. Data predicts that the EV global market will expand almost 5 times between 2016 and 2027, an annual increase of 20%.
Two models currently sold by GAC.
The GAC Group has a history going back to 1955 but it only began to develop rapidly from the 1990s, as with most of the domestic carmakers in China. It produces passenger as well as commercial vehicles, most of which are adapted from models of foreign partners such as Honda, Fiat, Isuzu, Mitsubishi and Toyota/Hino.
Geely Holding (or more correctly, Zhejiang Geely Holding Group in full) has been building up its portfolio of brands over the past two decades. While allowing the brands – which include Lotus, Volvo, Polestar and Proton – to operate autonomously, there has also been a strong effort to fully utilise the available synergies that such a large group of companies enables. Sharing resources can give a competitive edge in the business and Geely Holding has therefore not just developed the car companies but also looked at how it can create its own ecosystem for other elements.
One important area is powertrains and while each of the companies has had its own R&D in this area, a ‘centralised’ powertrain company would be beneficial to the group. To establish this, Geely Holding has announced a joint-venture with Volvo Cars to create Aurobay, a new company that will be in the powertrain business. The new company will be a global supplier of complete powertrain solutions including next-generation combustion engines, transmissions and hybrid solutions.
Aurobray will get Volvo’s engine facilities
Aurobay will initially be jointly owned by Volvo Cars and Geely Holding and as part of the creation of Aurobay, Volvo Cars will transfer all assets in its wholly-owned subsidiary Powertrain Engineering Sweden, including its engine plant in Sweden as well as the related R&D team, along with its engine plant in China and other relevant assets to the joint-venture in coming months.
The creation of the stand-alone joint venture and the transfer of assets allows Volvo Cars to focus fully on the development of its new range of all-electric models in coming years. The company aims to have 50% of its global sales volume made up of fully electric vehicles by 2025, of which 50% will be hybrids using powertrains supplied by Aurobay. By 2030, it will no longer sell vehicles with combustion ends and offer only fully electric models.
For Geely Holding, the new entity will benefit from the addition of a strong R&D team and technologically advanced and efficient combustion engines and hybrid powertrains for its portfolio of brands, creating a strong base for substantial operational, industrial and financial synergies.
Supply to other companies outside Geely Group
The new business also has plans to supply customers outside of the Geely Holding Group, with the objective of becoming a leading player in the supply of high-quality, low emission, cost-efficient powertrains solutions. The supply of engines to other companies isn’t something unusual and larger carmakers have been doing so for a long time. For example, Proton used to source engines for the Waja and Savvy from Renault.
Besides making and supplying powertrains to Geely Holding Group companies, Aurobray will also supply them to other companies.
Besides the new powertrain business, Geely Holding and Volvo Cars have other plans for collaboration. These include sharing of electric vehicle architecture, joint procurement, autonomous drive technologies and aftersales.
“As shareholders and portfolio-managers of both wholly-owned and listed companies, Geely Holding sees significant benefits from deeper partnerships and alliances whilst maintaining independence,” said Li Shufu, Chairman of Geely Holding. “We are encouraged by the potential synergies and growth opportunities created by this collaboration, which will create two even stronger globally competitive companies in the rapidly changing world of automotive technology and new mobility services.”
Mercedes-Benz AG and China’s Zhejiang Geely Holding Group have formally established a global joint venture company to handle the German carmaker’s smart brand. Pending regulatory approvals, the company will have its global headquarters in Hangzhou Bay, Ningbo with operational sales functions in both China and Germany.
The total registered capital of the joint venture will be 5.4 billion RMB (about RM3.18 billion) to transform smart into a leading player in premium-and intelligent electrified vehicles. Both parties will equally contribute equally, with the share of Mercedes-Benz mainly covered by the contribution of the smart brand.
A signing ceremony in March 2019 marked the beginning of establishing the joint venture to produce and market smart cars.
New EV model to be produced in China
A new generation of smart electric models will be assembled at a new purpose-built factory in China with global sales due to begin in 2022. The new generation will be designed by the worldwide Mercedes-Benz Design network and developed by the Geely global engineering network. As part of the vehicle-development program, the smart product portfolio will be extended into the fast-growing B-segment that are in line with smart’s brand positioning with a focus on pure premium electric and connected vehicles.
“The joint venture will bring the next generation of zero-emission smart electric cars to the Chinese and global markets. We look forward to continue our collaboration to bring desirable products and services to customers around the world,” said Ola Kallenius, Chairman of the Board of Management of Daimler AG and Mercedes-Benz AG.
Boardroom composition
The board of directors of the new joint venture will be made up of 6 executives with equal representation from both parties. On the German side, representatives will be from Daimler AG and Mercedes-Benz AG. Geely board representatives will include Geely Holding Chairman Li Shufu, Geely Holding President, Geely Auto Group President & CEO An Conghui, Geely Holding Executive Vice President & CFO Daniel Donghui Li.
Tong Xiangbei has been appointed the new global CEO of the smart joint venture and will oversee all operations relating to the brand including sales, marketing, R&D, production and after sales. Tong has more than 2 decades of experience in the automotive industry. Before joining the smart joint venture, he has worked for global automotive companies in the USA and in China.
Production line at the smart factory in France.
“The smart brand has a unique value and global influence; it has grown to be a leader in urban mobility. Geely Holding will fully support the smart brand with its full advantages in R&D, manufacturing, supply chain and other fields into the joint venture and support its development in China and globally. We will work together with Mercedes-Benz to transform the smart brand into a leading player in urban premium, electric and connected vehicles to successfully develop the brand’s global potential,” said Li Shufu.
History of smart
The story of smart cars goes back to the early 1980s when Nicolas Hayek, the CEO of the company making Swatch watches, had an idea to apply the same concept of personalisation to making and retailing cars as what was done for the watches. Initially, Volkswagen was involved in the project but Hayek later tied up with Mercedes-Benz. By 1996, the German carmaker took control of the company making smart cars and embarked on a more aggressive growth plan.
First generation of the smart fortwo was sold in Malaysia for a while.
The little smart cars found a niche as city cars but due to having to meet the demanding and high standards of Mercedes-Benz in the safety, they were not cheap. The brand also did not contribute profits and in fact, lost a huge amount of money.
However, Mercedes-Benz didn’t give up and modernised the factory in France to be more productive and cost-efficient. The third generation started rolling out in 2015 and is sold in over 40 markets worldwide. To date, 2.2 million cars have been sold since 1998.
