Last week we told you about the Lynk & Co 01, the compact SUV that’s set to be the first model from Chinese automaker Geely’s new millennial-aimed subsidiary. But the new cars are only part of the story. The newly introduced brand is also announcing plans for dealer-free sales and car-sharing capability.
The sales plan is definitely following Tesla’s lead, a fact acknowledged by Lynk & Co senior vice-president Alain Visser. The plan is to offer only direct sales in most major territories, including throughout the United States.
“We’re learning from what Tesla has been doing there,” Visser told us at the launch of the brand in Gothenburg, Sweden, home of Volvo—also a Geely property. “It’s not easy, and we know that because Tesla is a ‘home’ brand it has an advantage. We know we will face problems, but we are starting from scratch and—at the end of the day—our model will create employment.”
Visser claims the savings are potentially enormous since Lynk & Co models will be built in China and sold directly through a combination of online and “nontraditional” retail. We’re imagining lots of pop-ups at shopping malls. The brand also is considering following Tesla’s lead by paying existing owners for referral sales.
“The average distribution cost in the auto industry is around 25 percent of the value of a car, and that’s conservative,” Visser said. “With our model, we can take out half of that and offer a top-quality, well-equipped car at the level of a volume brand.”
Buyers of Lynk & Co cars won’t have to spend too long on the configurator. The company says it won’t be offering option packs or, indeed, much choice beyond color and powertrain. We’re told that standard specification will be generous and that owners will be able to customize their cars digitally, both by reconfiguring the main touchscreen display in the center of the dashboard and by downloading apps. Visser told us, “Think of it as a smartphone on wheels.”
Other automakers are already doing this, but Lynk & Co claims to be the first that will allow third-party development of apps for its cars’ Linux-based operating system; the company will be releasing an application programming interface (API) to allow these to be created. Apps will potentially work with a standard shareable lock system, through which vehicle owners could give time-limited access to their cars to other people through encrypted digital keys that can be used to unlock the car using a mobile phone.
“That means a dry-cleaning company could deliver your clothes to the back of your car while you’re away,” said David Green, Lynk & Co’s chief digital officer. “Or you could have your car taken away to be serviced directly from the office or even from outside your house while you’re still asleep.”
This also means it will be possible to share cars, or even rent them out for a limited time. Lynk hasn’t decided whether it will enter this market directly, although Visser said he regards Lynk & Co as selling “mobility rather than cars. If a customer wants to buy a car directly we won’t say no, but that’s not what we will communicate primarily.” Green also compared the company’s business model with the way consumers buy cell phones—“every two years you just get a new one”—suggesting a model that will be built more on leasing than on sales.
Closer examination suggests that there are actually two different business models in play, with the one for Lynk & Co’s home market in China being far more conservative. Dealer-free sales and the ambition of attracting younger buyers—the official launch party probably had the world’s highest concentration of hipsters—are missions for Western markets. This is where Lynk & Co will effectively harvest the credibility it will need to be taken seriously in China, where a company spokesman admitted vehicles still will be sold through more conventional channels.
“The hurdle is that the Chinese don’t trust their own products yet,” Visser said. “For me, we’re exactly the same as Volvo, a European brand owned by a Chinese company, designed and engineered in Sweden.”
We believe the plan is to make four separate models, with at least two of these going on sale when the brand is launched later next year in China, and in 2018 in the United States and Europe. In addition to the 01 SUV, there will be a sleeker crossover, a conventional sedan, and a swoopier four-door coupe. There will be more, though. Visser confirmed that the pure EVs the brand is also committed to are likely to be distinct models without gasoline siblings and also said he has longer-term aspirations to create a smaller, Mini-sized car.
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