Geely Halts Expansion Citing Global Auto Overcapacity

Geely Chairman and founder Li Shufu has highlighted the issue of 'serious overcapacity' in the global automotive industry, prompting Geely to halt plans for building new manufacturing plants or expanding existing production. This decision comes amid intense price competition in the Chinese auto market, which has driven many domestic manufacturers to explore international markets. Unlike peers such as BYD, Chery Auto, and Great Wall Motor that are building plants abroad, Geely is focusing on strategic partnerships, notably planning to utilize Renault's existing facilities in Brazil and acquiring a minority stake in Renault's Latin American operations, although Chinese regulatory approval for this has been delayed. Despite these challenges, Geely reported strong financial performance in 2024, with record sales and revenue growth, driven largely by new energy vehicles, while also maintaining a robust cash position. The company continues to face pressure from competitive dynamics and regulatory hurdles, including tightening controls on rare earth magnet exports from China. Geely's approach reflects a cautious strategy to balance growth ambitions with market realities and regulatory environments.