Geely’s approach to getting through coronavirus


At the height of the coronavirus outbreak in China, carmaker Geely turned deliveries of its latest sport utility vehicle into an elaborate ritual.

A video from a Geely dealership shows a suited salesman spraying down a car interior with clouds of disinfectant and then tying the keys with a red ribbon to a drone that he steers up to the window of a fifth-floor flat.

The high-tech key delivery was part of a burst of activity from the Chinese carmaker to minimise Covid-19’s impact on its operations and long-term plans to become the country’s first global carmaker.

Geely’s moves to innovate, secure supply chains and maintain its labour force helped the company to resume operations quickly when the lockdown lifted, according to analysts and the company.

“We were well placed to capitalise on the return to demand,” An Conghui, Geely’s chief executive, told the Financial Times, after dealerships were shut and production was halted for much of February.

Mr An said Geely had Rmb19bn ($2.7bn) in cash at the end of 2019 to help it deal with the crisis.

Geely said it sold more than 73,000 vehicles in March, 41 per cent lower than the number of units sold during the same period in 2019. The company lost money during the shutdown but declined to disclose figures.

But Mr An pointed to a number of decisions that girded the company as the pandemic brought the Chinese economy to a standstill.

On January 20, the day that Chinese President Xi Jinping first warned of the need to curb the spread of coronavirus, Geely launched a response team headed by Mr An that met daily.

“The biggest challenge has been our labour force,” said Mr An. The company has 3,500 workers in Hubei, the province where the outbreak started, and a total headcount of about 60,000.

Geely adopted quarantine measures in its 19 factories across China and meetings of more than three people were cancelled. 

The company implemented daily temperature checks for workers in Hubei before extending that to the rest of the country. Soon, every employee had their temperature checked three times a day.

To get people back to work, employees were split up into batches, depending on when they were expected to be able to return to factories and offices. Some were redeployed from elsewhere in the country. Many migrant workers were in their home villages and towns, after visiting family during the lunar new year just before the a national lockdown was imposed. The company hired a dozen buses to pick workers up and shuttle them back to factories.

Geely moved more of its sales online and promoted a new virus-fighting filtration system in its latest Icon sport utility vehicle. 

The company wanted to respond in as many ways as possible to work out what stuck, said Victor Yang, a Geely vice-president. “If we had stopped and not taken any action for the last three months, the impact would be even more severe. You have to look at each order and take all the opportunities you can,” he said.

Michael Dunne, founder of Zozo Go, a consultancy, said Geely’s efforts cushioned the blow of the economic shutdown and helped customer relations. “Delivery innovation may not spur a huge jump in sales but it will certainly help consumers begin to relax,” he said.

Editor’s note

The Financial Times is making key coronavirus coverage free to read to help everyone stay informed. Find the latest here.

But Geely’s recovery will ultimately depend on the health of China’s auto industry, which has called for government support after a rollback of tax breaks in the summer of 2018 pushed car sales growth into reverse for the first time in decades. 

Beijing has signalled it was willing to bolster support for the industry. It has already extended the deadline for automakers to hit new emissions targets and given them more time to sell old inventory.

Last month, Nio, the New York-listed electric car marker, announced a Rmb7bn ($989m) cash injection led by two state-owned enterprises.

Car dealers are already revving up for a return of sales. “This is the time for us to collect information on customers’ needs and accumulate potential customers,” said a salesman at Leadscar, an online car sales portal.

“No one is currently speculating on property, so more money should go into autos.”

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