China's Geely to Launch Auto Brand With Ride-Sharing Appeal

Zhejiang Geely Holding Group Co., the Chinese auto maker that owns Volvo Cars, is launching a new brand aimed at motorists who like to share their cars.

Called Lynk & Co., the new brand will start selling "01" compact SUVs next year in China, and in Europe and the U.S. from 2018. Lynk & Co. said it intends to sell cars directly to save on distribution costs.

The new car aims to tap into the rapidly growing market of ride-sharing and car-hailing services, embodied by tech giants such as Uber Technologies Inc. of the U.S. and China's Didi Chuxing Technology Co. The "01" will have a permanent internet connection, allowing owners to share their vehicles with other people and generate rental income.

The car has been "designed for a modern, urban audience who are used to collaborative consumption and all the benefits that this brings," Lynk & Co said in a statement.

The company said it would also launch an open digital platform, inviting developers to create applications for its cars. Sweden's Ericsson AB and Microsoft Corp. will provide the cars' connectivity and software services, it said.

Lynk & Co. said it would keep down the prices of its vehicles by limiting sales to online-only, with a fixed pricing model for all markets, and by offering a small number of versions, restricting configuration options.

While Chinese car makers have been gaining on foreign rivals at home in terms of design and quality, they are short of brand recognition overseas, and none sell passenger cars in the U.S. and Western Europe. Lynk & Co. said it intends to offer "the best of European design, engineering and technology."

Based in Gothenburg, Sweden, Lynk & Co.'s models will be based on a platform developed by Volvo and Geely, which has been designed to meet Western crash regulations.

The move to launch a new brand reverses a 2014 decision by the company to adopt a single Geely brand. Two years ago Geely scrapped its three separate brands, Emgrand, Gleagle and Englon, to streamline its business.

Geely acquired Volvo in 2010 from Ford Motor Co. and says it has invested more than $10 billion into the Swedish brand.

Write to Matthias Verbergt at [e-mail]

(END) Dow Jones Newswires

October 19, 2016 18:25 ET (22:25 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.