Geely Automobile plans new EV unit after profit fell by a third last year

Geely Automobile Holdings said on Tuesday it and its parent Zhejiang Geely Holding Group will establish a joint venture for electric vehicles (EV) and introduce a new brand called Zeekr.

The automaker’s profit dropped 32% last year.

In a stock exchange filing, Geely Automobile said the venture will focus on research and development, buying and selling of smart electric vehicles under the Zeekr brand.

Geely Automobile and parent Zhejiang Geely Holding will jointly invest 2 billion yuan ($310 million) in the new venture. Geely Automobile will own 51% of this company, it said.

In two previous reports, people knowledgeable about the matter exclusively informed Reuters regarding Geely’s plans for the new company and brand.

Hangzhou-based Geely Automobile, the highest-profile Chinese automaker in the world because of the parent group’s investments in Volvo Cars and Daimler AG, published 2020 profit of 5.53 billion yuan ($850 million), against 8.19 billion yuan in 2019, as auto sales in the world’s biggest market was impacted by the COVID-19 pandemic.

Revenue dropped 5% from the previous year to 92.11 billion yuan.

Geely Automobile sold 1.32 million cars last year, declining from 1.36 million units in 2019. It expects to sell 1.53 million cars in 2021.