Geely to launch new car brand to share Volvo tech with

Geely is planning to cash in on its huge investment in Volvo by launching a whole new brand that will share engines, transmissions, technology and Swedish car-maker’s newly-developed Common Modular Architecture (CMA) platform, according to new reports from newswire Reuters.

So far, it’s not known what name Geely is planning to launch its line of re-clothed Volvos under but, according to sources, the project to launch the new brand has been called “Operation L”.

Both Volvo and Geely declined to comment publicly about the rumours at this week’s Beijing motor show but insiders have already confirmed Operation L’s first vehicle will be a small SUV based on the CMA platform.

Shortly after a small sedan will also follow, both are said to already be in development.

The decision to launch yet another car brand as the Chinese economy slows has drawn plenty of comments from investment analysts, but Geely is currently outperforming the market. Last year it made 510,000 vehicles -- a 22 per cent rise on its 2014 volume.

Volvo earnings, meanwhile, have reportedly tripled following the success of the recently launched XC90 SUV.  The Swedish car-maker is now on track for record 2016 sales.

The L brand, according to Reuters, has been created to help its parent rival General Motors and SAIC Motor corp in the Chinese domestic market leaving Volvo to target the luxury top-end of the market.

Operation L will have to work hard to make an impression. Currently in China there’s at least 12 ‘foreign’ car brands battling it out against 20 local car manufacturers.

Confusing consumers even further, of those 20 domestic Chinese brands, many have spun off numerous premium and budget sub-brands.

“The last thing the Chinese automotive world needs is another brand," said James Chao, Asia-Pacific chief of consultancy IHS Automotive speaking to Reuters. "The elimination of more brands in China should be the route."

Even as recently as two years ago Geely announced plans to streamline its offering, declaring it would eliminate its three sub-brands and only sell under its ‘Geely’ brand. It seems, that course of action has now been reversed if the rumours are true.

Some are even suggesting the launch of the “Operation L” car brand will see Geely invest in yet more manufacturing facilities.

Confusing matters further, Geely itself has already stated that it too will launch a range of cars based on the CMA platform.

Those vehicles, said the Chinese car-maker, have also been co-developed with Volvo and will launch in both Europe and the US.