BERLIN -- Geely Automobile's new global marque, Lynk & CO, plans to challenge volume brands starting in 2018 by offering models designed and engineered in Sweden, built in China and sold at extremely competitive prices thanks to direct distribution.
Lynk & CO sales and marketing chief Alain Visser, who has held top jobs at Ford, General Motors and Volvo, spoke with Automotive News Europe Editor Luca Ciferri on the sidelines of the brand's unveiling here.
Q: What are Lynk & CO's midterm targets?
A: We aim for more than 500,000 annual global sales within five years. By that time, our range will comprise at least five models, but there could be more.
What is Lynk & CO's rollout plan?
We will launch in China in the fourth quarter of 2017 and in Europe and in the United States simultaneously in late 2018.
Will the 01 compact SUV be Lynk & CO's only product when the marque debuts in Europe and the United States?
By then, it is likely that in China we will have a second product. We are not sure yet if we will commercialize it in other parts of the world.
Why do you want to have only company-owned dealers?
The current car distribution model is broken. Automakers design, engineer and build cars but then "outsource" their sales to dealers, losing their grip on a part of the process that is crucial for brand-building and margins. We want to control the entire process because we want to challenge every link in the distribution chain to enrich and simplify car ownership by redefining how cars are bought, owned, connected, serviced and used.
Why do you need physical dealers when Lynk & CO aims to rely on Internet sales?
Research shows that about 10 percent of European and U.S. customers are eager to buy their next car over the Internet, but less than 1 percent do it in Europe. ... We have to be realistic. Buying a car is the second-biggest purchase a person makes [after buying a house]. It is not the same as buying a pair of shoes over the Internet. This is why we need dealerships. ... We plan a combination of retail stores, shopping mall stores and pop-up stores without any traditional dealer buildings outside the cities.
If you slash distribution costs, what effect will that have on your retail price?
Think about a fully equipped premium car offered at a price below what is charged by volume manufacturers. ... Lynk & CO will also offer fixed prices whether the car is bought online or at a dealership.
Why is Lynk & CO offering fixed-price collections rather than lots of different trim levels?
One of the reasons why we will be able to offer highly competitive prices is because of a radical simplification of the product offering. We were inspired by the fashion and technology industries, which is why we are replacing trim levels and option lists with a small selection of fully equipped, fixed-price "collections" aimed at meeting customer preferences. Offering a limited number of trim levels rather than base models with a long list of options simplifies manufacturing because we drastically reduce the number of build configurations. ... There will be no options.
Will you offer an entry-level model with a very competitive price just to lure first-time buyers?
We will not have an entry model that exists only to create a very competitive price point. Our price range will be narrower. If other automakers' prices range from 100 to 500, ours will range from 100 to 150 per collection.
What about service?
In Europe and the U.S., we will rely on Volvo dealers and independent chains for service. Using Volvo dealers will be a win-win-win situation. This will create additional business for Volvo dealers, who are increasingly losing revenue in service because Volvo's products are so good. Secondly, Lynk & CO is happy because as a startup brand we don't have to invest in our own workshops. Thirdly, the customer is happy because his car is serviced by a premium-brand network.
How will a customer interact with the service provider?
Lynk & CO cars will be picked up for servicing and delivered directly to the owner, regardless of whether the service is performed by a Volvo dealer or by an independent workshop chain.