China's Geely targets slice of premium electric car market with 'startup' brand Zeekr

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NINGBO, China/BEIJING (Reuters) - Chinese automaker Geely, owner of Volvo Cars, on Thursday launched a high-end electric vehicle (EV) brand called Zeekr, targeting growing Chinese demand for premium EVs that has boosted sales for Tesla and Chinese peer Nio.

Parent Zhejiang Geely Holding Group and Geely Automobile said last month they would jointly invest 2 billion yuan ($306 million) in the new venture, seeking to position Zeekr as a startup under the Geely group, which is also known overseas for its 9.7% stake in Germany's Daimler AG.

The price tag for Zeekr cars will be around 300,000 yuan, and Flynn Chen, Zeekr's vice president, said the brand would explore new sales and marketing methods, including allowing customers to subscribe to car-using rights and offering a stake in the company to car buyers.

At a product event in harbour city Ningbo, Zeekr Chief Executive An Conghui said it would at least roll out two models each year in the next three years, after Zeekr 001 this year.

An said Zeekr would share a 4.9% stake in the company with its customers. The starting price for the Zeekr 001 will be 281,000 yuan after receiving government subsidies.

He declined to rule out the possibility of transferring Geely’s Geometry brand to the Zeekr company.

Yale Zhang, head of Shanghai-based consultancy AutoForesight, said the price and expected performance of the Zeekr 001 represented a direct challenge by an established carmaker to the industry's new players.

Zhao Chunlin, general manager of Zeekr's production base in China's eastern city of Ningbo, said the plant, owned by Geely group, would have an annual manufacturing capacity of 300,000 EVs. Zhao said the plant could make six models on its production line, and could further expand production capabilities.

Vice President Chen said Zeekr would use a direct sales model to manage pricing and inventory. The brand plans to open more than 100 stores this year.

Geely Automobile's parent group announced a flurry of tie-ups by Geely earlier this year as it pursues a goal of becoming a leading EV manufacturer and engineering service provider.

(Reporting by Yilei Sun and Tony Munroe. Editing by Kenneth Maxwell and Mark Potter)