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About China Automobile Quality Network
The China Automobile Quality Network is the first official automobile quality complaint monitoring platform in China, sponsored by the State Administration for Market Regulation. The ranking evaluates five factors: complaints and faults, defect risks, reliability, safety, and environmental protection.

Source: Sina, China Automobile Quality Network

HONG KONG -- China's Geely Automobile Holdings reported ostensibly stellar results on Tuesday, but the company's CEO openly vented dissatisfaction and offered self-criticism rarely seen from a mainland Chinese corporation on how things were not going right.

"Even though we had some achievements, what is important to do now is to examine our shortcomings," Gui Shengyue said at the first face-to-face annual earnings conference for reporters and analysts since the COVID pandemic began.

Gui cited two "core issues" for his dissatisfaction: the slowness with which the company is taking on new energy vehicles (NEV), and the lack of clarity in the strategy going forward. NEV is a Chinese term that includes pure electric vehicles and plug-in hybrids.

Geely is seen as one of the "traditional" automakers that established its market position over the past few decades relying mainly on gasoline-combustion engine cars. Gui acknowledges that the company lags in a rapidly electrifying auto market, especially at home.

The ratio of NEV in its overall sales jumped to 22.9% in 2022 from 6.2% a year ago, but Gui said, "In the road of developing NEVs, we are already relatively far behind our excellent peers in our industry," most likely referring to competitors like Tesla and compatriot BYD.

He candidly said that Geely has shortcomings in its products and its marketing. Gui also conceded that the automaker's strategy was unclear, including the positioning of its three core brands -- especially Lynk & Co and Zeekr, which were introduced in the past few years.

An Conghui, an executive director who doubles as president of parent company Zhejiang Geely Holding Group, clarified the brand positioning. Lynk targets middle to high-class customers, with prices of 200,000 to 300,000 yuan, while Zeekr aims for the top range with prices beyond 300,000 yuan. The original Geely brand is for the mass market, at 200,000 yuan and below.

Geely's bottom line benefited from a one-off windfall: the acquisition of a 34% stake in a South Korean auto joint venture with France's Groupe Renault and Samsung Group, completed in November.

The consideration of 264 billion won ($202 million) that Geely paid was much lower than the total net fair value of what it actually purchased. The difference of 1.74 billion yuan was recognized as a windfall gain, enough to offset cost increases and raise net profit beyond the 2021 level.

Regarding the price war that erupted this year in the mainland Chinese auto market, Geely management seems to accept this reality calmly.

An thinks it is "normal" as the battle for survival among automakers has begun, saying "the competition for elimination has started [and] the company's comprehensive strength has become more important."

He was confident that Geely will weather the storm, trying to distance itself from price-cutting cycles while focusing on improving its "brand, technology, quality, service and corporate morals."

Geely made a big leap in 2022 on the international market, where its wholesale export volume grew 72% to 198,242 units. The company did not disclose regional figures, but Geely is one of the Chinese brands that has taken advantage in Russia, where Western automakers are leaving or announcing intentions to withdraw as part of the economic sanctions against Moscow's invasion to Ukraine.

Overall sales of new cars in Russia dropped by 58.8% in 2022, but Geely fell by only 1%, the Association of European Businesses reports. Its market share more than doubled to 3.6% from 1.5%, surpassing Western brands such as Toyota Motor, Skoda, Volkswagen and Nissan Motor.

Asked about Geely's performance in Russia and the impact of geopolitics, another executive was less straightforward.

"As a company, we do not comment on geopolitics," said Daniel Li Donghui, chief executive of Zhejiang Geely Holding Group.