Chinese auto maker to sell compact SUVs that are equipped with internet service

By Matthias Verbergt and Friedrich Geiger 

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

Called Lynk & Co., the new brand aims to tap the global market for ride-sharing and car-hailing services while taking on giants including Volkswagen AG and BMW AG. The company will start selling its 01 compact sport-utility vehicle next year in China, and in Europe and the U.S. in 2018.

The launch is the latest attempt by a Chinese car maker to appeal to affluent westerners after earlier efforts failed. Qoros Auto Co., Jiangling Motors Corp.'s Landwind brand and Brilliance China Automotive Holdings all entered Western Europe in recent years but sold very few cars.

The cars will have a permanent internet connection, allowing owners to share their vehicles and generate rental income. The feature make Lynk & Co. a rival of BMW's Mini brand, which launched a model earlier this year which owners can rent out via the company's DriveNow car-sharing service.

"We are competing against the likes of Uber as much as we are against other car brands," said Alain Visser, senior vice president of Lynk & Co.

In the coming five years, Lynk & Co. plans to launch at least five models, which also will feature some autonomous-driving capabilities, Mr. Visser said, adding that the company aims to sell more than 500,000 cars by 2021.

The cars are being "designed for a modern, urban audience who are used to collaborative consumption and all the benefits that this brings," the company said.

Lynk & Co. plans to launch an open digital platform, inviting developers to create networked applications for its cars.

Sweden's Ericsson AB, Microsoft Corp. and Alibaba Group Holding Ltd. will provide the cars' connectivity, IT and software services, it said.

The company 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.

While Chinese car makers have been gaining on foreign rivals at home in terms of design and quality, they fall short when it comes to brand recognition overseas, and none currently sell passenger cars under their own brands in the U.S. and Western Europe.

Lynk & Co.'s models will be based on a platform developed by Volvo and Geely, and are designed to meet Western crash safety standards.

The move to launch a new brand reverses a 2014 decision by the company to adopt a single Geely brand.

Write to Matthias Verbergt at Matthias.Verbergt@wsj.com and Friedrich Geiger at friedrich.geiger@wsj.com

(END) Dow Jones Newswires

October 21, 2016 02:48 ET (06:48 GMT)