① “The company is currently actively exploring various solutions to expand production capacity and making the best use of surplus capacities in different regions, without building new automobile production plants or expanding the capacity of existing factories.” On November 4, Geely Auto told Cailian News in response to reports about the renovation of the former SAIC-GM North Shenyang plant (Phase III). ② The day before, Geely acquired 26.4% of Renault Brazil's shares.
Geely Auto, which has already achieved 83% of its annual sales target, is now facing real production capacity pressure.
"The surge in Geely Galaxy sales indeed imposes higher demands on production capacity. The company is actively researching and exploring various solutions to expand capacity, making the utmost effort to utilize remaining capacities across different locations, without building new automobile production plants or expanding the capacity of existing ones." On November 4, in response to reports regarding the renovation of the Shenyang Original SAIC-GM Beisheng Plant (Phase III), Geely Auto informed Cailian Press.
Previously, market sources indicated that the Shenyang Original SAIC-GM Beisheng Plant (Phase III) was undergoing renovations and would subsequently be used to supplement Geely Galaxy's production capacity. A person close to Geely revealed, "Negotiations have been ongoing for quite some time; currently, Galaxy’s production capacity is tight."
With robust performance in the new energy sector, Geely Galaxy’s cumulative sales from January to October exceeded 1,002,461 units, making it the fastest new energy brand in the industry to achieve annual sales of one million units. Presently, the annual production capacity of its five major production bases—Taizhou Linhai, Shaanxi Baoji, Guizhou Guiyang, Hunan Xiangtan, and Qiandang—is nearing saturation. As one of SAIC-GM’s four major production bases in China, the Beisheng plant was responsible for producing fuel-powered models such as the Buick GL8 and Enclave, with an annual capacity exceeding 300,000 vehicles. It is understood that this plant consists of three phases and was fully shut down in February this year.
"In today’s global automotive industry, there is serious overcapacity. Geely has decided not to build new car production plants or engage in redundant construction. Instead, Geely aims to make full use of excess global capacity, striving to carry out pragmatic cooperation and resource restructuring to the greatest extent possible." On June 8, during the 'China Automotive Chongqing Forum,' Li Shufu, Chairman of Geely Holding Group, stated that by utilizing excess global capacity, practical cooperation and resource restructuring can be maximized. This approach allows for leveraging mature quality assurance systems and skilled technical labor while also increasing the utilization rate of peers’ excess capacity.
"Hitting the brakes" on factory construction, Geely has once again partnered with Renault. On the previous day, Geely Holding Group and Geely Automobile Holdings Limited officially signed the final agreement for a strategic partnership in Brazil with the Renault Group. According to the agreement, Geely acquired 26.4% of Renault Brazil’s shares, while the Renault Group remains the controlling shareholder and consolidates financial statements.
"As a minority shareholder, Geely will share the production capacity and market network of Renault Brazil, accelerating the expansion into the Latin American automotive market." Geely stated that the company will localize production at Renault Group’s Brazil Elton Senna Industrial Park and, relying on Renault Brazil’s existing dealer network, sell Geely-branded new energy vehicles. "Geely’s electric SUV model EX5 will be sold through the entire network of Renault’s branded dealers."
"As the pace of expanding global markets and transitioning to electrification accelerates simultaneously, there remains a significant shortage of high-quality production capacity. The capacity for products that truly possess market competitiveness and meet consumer demands is not only not excessive but rather insufficient." In the view of industry insiders, although some enterprises may have large production scales, their products fail to meet market demands due to factors like quality and technology, rendering their capacity inefficient or even ineffective, wasting substantial human, material, and financial resources. Meanwhile, effective capacity capable of producing high-quality, trend-aligned products may not be fully unleashed due to resource constraints, impeding overall industry upgrading. "Leading companies need to expand production, and renovating old capacity is the most time- and cost-efficient method, especially in terms of saving time, as future market trends are unpredictable—the longer the production expansion drags on, the greater the risks become."
