Geely Billionaire Warns of Auto Factory Overcapacity

Li Shufu, the influential billionaire behind the Geely auto empire, has issued a stark warning about the pervasive issue of overcapacity in the global automotive industry. Speaking from Gothenburg, Sweden, Li highlighted that the sector has built too many factories, leading to a serious oversupply problem worldwide.

To address this challenge, Li intends to foster greater cooperation and capacity sharing among Geely's diverse brands, which include Volvo, Lotus, Polestar, and Zeekr. This strategy aims to optimize resource utilization, particularly by having European factories produce vehicles for various Geely brands. Li emphasized Geely's preference for localization in Europe rather than simply exporting vehicles from China.

Within China's intensely competitive market, where domestic brands hold a dominant 60% market share, Li acknowledged the financial struggles of many major players. He indicated that carmakers naturally seek opportunities beyond their domestic market. Meanwhile, Volvo awaits a crucial US regulatory decision on vehicles with Chinese-developed software, expected before summer, as its Americas sales declined 29% in the first quarter.