Until a year ago most Malaysian have never heard of Mr. Li Shufu. They might have heard of Geely, as the Chinese car company that expanded to Europe by buying into Volvo Cars. But that is the extent of the average Malaysians knowledge about the man behind this automotive powerhouse that could very soon be bigger than the Volkswagen Group….and be more profitable.
The 54 year old Mr. Li is the son of a farmer from China’s eastern Zhejiang province. He founded Zhejiang Geely Holding Group in 1986, which was at the time building and selling refrigerators. He moved into motorbike manufacturing in the 1990s before turning to autos in 1997.
The purchases of Volvo Cars and London Taxi and the creation of Lynk & CO was a surprise move that left many economists and financial players thinking this was the extent of his buying spree. They were soon proven wrong.
In 2017 he won control of iconic British sports car maker Lotus from Malaysian automotive conglomerate DRB-Hicom and he acquired a 49.9% stake in Proton and spent a shocking USD3.3 billion to become the biggest shareholder of Volvo Trucks, the world’s second-largest truck manufacturer.
Then in 2018 he made the biggest move and shocked the automotive world especially the German car industry by buying a stake in Daimler AG.
Reports surfaced in late November 2017 that Daimler had rebuffed advances from Li, who reportedly was seeking to acquire about 5 to 7%. Then, last month, Li disclosed that after a series of stock market purchases, he had acquired a 9.7% holding in Daimler through the Geely Group, which is owned by Li and managed by Zhejiang Geely Holding.
In early 2017 Li looked at buying into FCA, a then struggling automotive giant. FCA has been looking for a friendly suitor for a year and even though they are the third-largest automaker in the U.S., the fourth-largest in Europe, a major player in Latin America, they have very weak exposure and sales in Asia. By buying into FCA, Geely would have gotten the iconic Jeep brand which has retired from Malaysia and also Indonesia. Geely also would have gotten iconic brands like Maserati and Alfa Romeo.
FCA owns Abarth, Alfa Romeo, Chrysler, Dodge, Fiat, Fiat Professional, Jeep, Lancia, Ram and Maserati. FCA is present in more than 150 markets. FCA has 231,000 workers operating in 162 manufacturing facilities and 87 Research & development centers.
In China, Geely’s sales were up 45% in January 2018, making it the second best-selling automaker. It was No. 5 overall for production, but that ranking includes joint ventures with foreign automakers. Among domestic automakers, it was No. 1
Since moving on from FCA last year, Li has spent more than USD12.5 billion in automotive acquisitions. Considering that he was ready to buy FCA for USD22 billion, he could have nearly USD10 billion handy for further acquisitions.
Getting financial resources seems to be no obstacle. He plays an active political role in China and is a regular delegate to the Chinese People’s Political Consultative Conference, a largely ceremonial political advisory body.
His political savvy may have helped get the Daimler investment done smoothly, analysts and local media said, especially amid a crackdown by China on overseas deals.
In announcing the Daimler deal, China’s official Xinhua news agency said Geely reflected a wider “bullish” push by local automakers overseas and the overall “rising strength of Chinese automakers.”
Li’s business ambitions also appear to align with those of China’s government, which wants to strengthen the country’s high-tech expertise and leapfrog global rivals by becoming a leader in electric vehicles and autonomous driving.
