[ET Net News Agency, 12 February 2020] Nomura said the immediate benefits of Geely
Automobile's (00175) potential merger with Volvo Cars would be the cost synergies in such
areas as platform-sharing, powertrain collaboration, centralized parts procurement, R&D
expenditure, EV technology, and so on.
Longer-term, there could be stronger revenue opportunities for Geely and Lynk brands as
their brand equity further improve amongst Chinese consumers, thereby giving Geely/Lynk a
greater chance to gain market share and move upscale.
For Volvo Cars, it could penetrate further into the Chinese market with the help of
Geely's vast network in China, which is already Volvo's second-largest market and also its
fastest-growing.
Nomura maintained its "buy" rating on Geely, with a target price of HK$17.9. (KL)