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Customer LoginsLynk & Co unveils connected business model
New global brand Lynk & Co highlights that its cars will always be 'connected' and its business model is based on 'connectivity'.
IHS Markit Perspective
- Significance: Owned by Chinese company Zhejiang Geely Holding, new brand Lynk & Co aims to reach younger consumers and is mainly targeting volume sales in tier 1 cities in China.
- Implications: The brand's main focus is to highlight its northern European heritage in terms of engineering and design, while targeting a young consumer base who choose a lifestyle with a high level of connectivity, mainly in China.
- Outlook: IHS Automotive's current forecasts are that the brand's first model, the 01, will be followed by more models in the C segment initially, and then D-segment models in the future.
Lynk & Co, the new brand of Zhejiang Geely Holding Group (ZGH), the parent company of Volvo and Geely, aims to be "always connected", according to Alain Vissier, senior vice-president − the man behind the vision to create a car that is "a smartphone on wheels", he said, speaking at a launch event in Berlin, Germany, yesterday (20 October).
Vissier says that, by creating a business model that reflects and revolves around 'connectivity', the brand will make cars "relevant to younger consumers". He argues that cars have been left behind compared with the fast-paced development of the mobile phone industry. Working with partners in the mobile phone industry, Vissier aims to create a car model that embodies more than just being a car. He says the brief was simple, with the company's founder and chairman, Li Shufu, and CEO An Cong Hui giving clear instructions: produce the best vehicle in the industry, become the first Chinese manufacturer to have a global footprint and, most importantly, do things differently.
Buying a Lynk & Co car
The business model for purchasing a Lynk & Co car is that online purchases will be integral to the process. The consumer can choose the model of choice online, and will be able to choose from a set combination of options. For example, there will be two-tone colour combinations, which are fixed. The idea is to reduce the complexity involved in ordering a new vehicle, allowing the automaker to offer a combination of options, thereby keeping the vehicles ready to deliver immediately. "We will offer standard, very well equipped combinations," said Vissier.
So, the idea is for the consumer to choose the vehicle online, the company checks its availability in the local store, and it is then delivered to the consumer. The whole process is meant to be a fast, smooth, and hassle free. In addition, there will be just one price. The one-price concept, says Vissier, means that across Europe the price of the car will remain the same, except for different value-added tax (VAT) rates.
Unlike current brands which offer new model-year variants, Lynk & Co will offer "seasonal" variants. "No model year changes," said Vissier, "We will do collection changes − winter to summer."
Servicing a Lynk & Co car will involve using the "shared lock" system. This involves the customer contacting the service centre and requesting a service. Then the vehicle's digital key will allow the service team to collect the car, service it, and return it. Therefore, the car can be serviced while the owner is on holiday, at work, or otherwise occupied. "Servicing, maintenance, it's all dealt with. One of the many wonders of having a car that's 100% connected, 100% of the time, is that we can book your car in, pick it up, leave a replacement and drop it back afterwards," Lynk & Co says on the company website.
Sharing a Lynk & Co car where the 'shared' system also allows the car to be 'rented' out or 'shared' by the owner when not using it. This system allows for the owner of the vehicle to let friends use the car while the owner is busy, or allows the car to be rented out while, for example, the owner is in the office, on holiday, or otherwise busy. "You get an alert to tell you someone wants to borrow your car. Check their profile, click Go Ahead. We'll turn their key into your key and off they go," the company states.
The 'Share' button is, therefore, intrinsic to the brand's first model, the 01 compact sport utility vehicle (SUV). And the 'Share' button will be in every single Lynk & Co vehicle.
Connectivity is at the heart of the brand and its cars will "always be connected", according to the company. With 4G Wi-Fi on all the time, there will be constant connectivity, says the brand. Lynk & Co has partnerships with telecoms company Ericsson to create a car connectivity cloud. "The digital platform will feature an API open to third party developers, which will provide endless opportunities to personalise, enrich and expand the experience," the brand states. Lynk & Co is also working with Microsoft and Alibaba to build a new digital customer infrastructure for the car industry, with new digital order, supply, sales, and CRM systems and custom applications for user interaction. The Lynk & Co models will also include a fully digital dashboard, 10-inch touchscreen, and voice-activated controls.
Outllook and implications
Lynk & Co is a collaboration between automakers from East and West and is intended to be a 'cool' brand that is the most 'connected' in the industry. Vissier stresses that, as a consequence of this, the 'Co' in the name is of immense importance to the new brand name. He says that the aim was to choose a name which sounds more like a fashion brand than a car, where the link between East and West is highlighted, but that the brand means more than just cars − it may start with a car, but does not end with a car, stresses Vissier.
The reality is that the brand has to create and deliver cars that consumers want. The target consumer group for Lynk & Co is young, urban, relatively sophisticated buyers. These buyers reside in tier 1 cities in China and will be well aware of international automotive brands, and will generally have the financial ability to purchase models produced by international automakers with joint ventures in China. The brand aims to differentiate itself from the existing Geely brand by offering higher-specification features, as well as having a strong design influence from northern Europe. Where the Geely brand targets consumers in the tier 2 and tier 3 cities, the Lynk & Co brand aims to target those in tier 1 cities, such as Shanghai, Guangzhou, and Beijing, taking on the existing joint-venture brands.
In Europe, the brand aims to attract buyers who aspire to, but cannot afford to, purchase Volvo, Mercedes, or Audi cars. However, in reality, Lynk & Co products will likely compete with products from South Korean brands, both in Europe and in China.
About this article
The above article is from IHS Automotive Same-Day Analysis of automotive news, events and trends, and is a deliverable of the World Markets Automotive Service. The service averages thirty stories per day and also provides competitor and country intelligence. Get a free trial.