China’s latest new car brand is something new – it’s a semi-luxury pitch built upon strong European underpinnings. There’s NZ interest.
POTENTIAL for China’s first export-set luxury brand to show in New Zealand is far from certain, yet if it does then one particular distributor would expect to have first dibs.
Lynk and Co – which despite having an ‘old English establishment’ tenor to its name is wholly new, wholly about cars and wholly Chinese – is a subsidiary of Geely Automobile, only the fifth largest of China’s carmakers and better known outside of its own market as the owner of Volvo.
Out to represent as a middle market brand on its home turf, Lynk and Co might nonetheless be viewed as something more upmarket in cited and future export markets, given that its vehicles are all based on latest Volvo underpinnings.
It has no intention of being a stay-home: Intention is to be in Europe and in the United States by 2018, a year after that China debut. Once settled into those markets, it’ll stay looking further.
Whether New Zealand is being considered is yet unclear, but it cannot be ruled out suggests Volvo New Zealand boss Coby Duggan, who imagines his operation would at least be offered first opportunity, given its relationship with Volvo and Geely.
“I would have thought, given the factory ownership structure, that we would be the most logical party to approach first.”
But nothing soon, he adds.
“It’s not on the radar. There’s been no reference to it in terms of our correspondence with head office and the factory at all.
“Who knows what the future holds but at the moment that’s the extent of it.”
Is there interest? New Zealand’s free market approach means we already have more car brands here than many places – beating even the United States – but, yes, there’s always room for more, Duggan suggests.
“We’ve certainly got plenty on our plate at the moment and there’s obviously a lot of water to go under the bridge in terms of that first car and how they are going to position, for it to make sense to us, but that’s not to say it might not ever happen.”
And while Chinese brands that aim at the budget end tend to struggle here, because they butt heads with used imports and usually fail to sway consumer interest even after comparisons are made – maybe Lynk and Co could do okay, for a number of reasons.
The genetic mix is right. Its first vehicle, unveiled in Berlin just the other day, a sports utility called the 01, is based on the Complex Modular Architecture (CMA) platform developed by Geely and Volvo, which Geely acquired from Ford six years ago.
Volvo will use the platform to renew its 40 compact range previewed in May by the 40.1 and 40.2 concept cars. The 40.1 compact SUV will become the XC40 for production and is set to debut at the end of next year. Further, Lynk’s cars have been created under the leadership of Geely design chief Peter Horbury, an Englishman who was a former top designer at Ford and Volvo.
SUVs and crossovers are hugely popular here. The types together comprise the biggest single new vehicle category and have achieved the biggest percentage increase in year-on-year volume for several years.
Presented in Sport and City formats, the 01 is intended rival models such as the Nissan Qashqai and will offer a manual transmission or a seven-speed dual-clutch automatic transmission. Lynk also plans to add a compact sedan and other models to its lineup. These will have numerical names including 02 and 03.
The drivetrain? It’s a hybrid powered by a 1.5-litre, three-cylinder petrol engine and an electric motor in this car, but the brand has expressed ambition to implement plug-in hybrids and full-electric vehicles in the future. The powertrains are sourced from Volvo.
One factor is interest is the sales methodology. Geely says it wants to keep down costs - and the prices of its cars - through a sales and distribution model based on internet retailing and sales from its own stores.
With traditional distribution costs typically 25 percent of the price of a new car, it says the business model will deliver significant savings, which will in turn enable it to sell cars at “highly competitive” prices.
“Our aim is to enrich and simplify car ownership by redefining how cars are bought, owned, connected, serviced and used,” said a Lynk senior vice president, Alain Visser.
There’s nothing to stop a brand attempting this approach in New Zealand, but would it work?
Duggan notes that Toyota has put a toe in the water with web selling of specific versions of the Prius and 86.
The idea was that you logged on and - in the case of the 86, a base RC model – then tailored the car to specific trim requirement. But the actual purchase was still conducted at a designated dealership in traditional cash-over-the-counter fashion.
Neither programme had great success. However, New Zealand vehicle sales legislation does allow it.
“It’s not impossible and I guess it is an option for every manufacturer. It is something that has been talked about (locally) for years and years but very few have dipped a toe in the water.”
Its research shows that about 10 percent of US and European customers are eager to buy their next car over the internet, but less than two percent do it, Visser said.
For that reason, Lynk will need significant market coverage with company-owned dealerships, which also will deliver cars bought on the brand's website. Also, Lynk will offer fixed prices, which would be the same for internet and physical sales.
“The current car distribution model is broken,” he told a major automotive website this week. In his view, carmakers design, engineer and build vehicles but then “outsource” their sales to dealers, losing their grip on the portion of the distribution process crucial for brand-building as well as for margins.
Another Lynk concept is to introduce technologically advanced cars that are affordable but still upscale. The brand intends to price low by offering a limited number of trim versions rather than base models with a long list of options that add to manufacturing costs by creating lots of build configurations.
The brand has been called Lynk to emphasise that its cars will offer a high level of connectivity. The CO in the name stands not for ‘company’ but for ‘connected.’
All Lynk models will come with a large central touchscreen and telematics systems that are always connected to the internet and to the car’s own cloud network. A share button will allow the owner to provide others with access to the vehicle via a shareable digital key. Owners can use the Lynk app to control and monitor their car from a smartphone - or directly from the car