LYNKCO_mediaevent_19OCT_05-300x185

The Lynk & Co 01 SUV was unveiled at a Gothenburg media event Wednesday (Photo: Geely)

GOTHENBURG -- Western carmakers occasionally launch new global brands. In 2015, Hyundai did so with its Genesis luxury marque and PSA/Peugeot-Citroen turned its DS into a separate near-premium brand.

But few Chinese automakers have to date taken the step. True, Chery in 2011 created Qoros, a joint venture with Israeli investors and the brand launched its first car at the Geneva auto show in 2013. But, so far the company hasn't expanded beyond China.

Now comes Geely, which this week announced the creation of Lynk & Co, an upmarket brand that claims it will have industry-leading connectivity and relies heavily on technology shared with Geely-owned Volvo Cars. The first car to come to market, the Link & Co 01, was unveiled here Wednesday. It will go on sale in China in late 2017.

"Critics will ask: Why do we need another car brand?" Geely CEO Conghui An said at a press event here. He then explained that Lynk & Co vehicles, which will have a northern European design flavor but will also have "global genes," will help open new markets for Geely and make it a truly global company.

Geely actually already has been a global company since it acquired Volvo Cars from Ford Motor in 2010.

But something was missing in this equation: With Geely's help, Volvo has grown rapidly in recent years. But there has been little opportunity to share engineering, development and purchasing resources between the two brands. That meant cost-saving opportunities were limited.

The reason is simple: Volvo is building premium cars, while Geely vehicles are made for the volume market. The requirements for each brand were just too different to allow close cooperation.

That's where Lynk & Co comes in. It is positioned somewhere in the middle between Volvo's premium terrain and the volume market, where Geely's cars are sold.

If Volvo doesn't beat it to the punch, the new brand will be the first to launch a car built on the new Compact Modular Architecture (CMA) that Volvo and Geely developed jointly for mid-sized vehicles. Volvo plans to launch a new XC40 on the platform next year as well.

"With the common architecture, Geely can update its technology and Volvo can get economies of scale," Volvo Cars CEO Hakan Samuelsson said.

Geely CEO An acknowledged that the Swedes played a big role in his decision to launch a new global brand. "We cannot go on this journey without the support of Volvo," he said.

The two big questions are whether Lynk & Co has enough to offer to be internationally successful and whether the company will actually go global after initially launching only in China.

The new brand's first vehicle will be a compact SUV that has attractive looks and a large array of connected functions. But it remains to be seen whether, from a design point of view, the Lynk & Co 01 is different enough to attract great buyer interest. The same holds true for connected functions, which are becoming increasingly common across all brands and will, thus, be less of a differentiating factor.

A more compelling reason to buy the 01 may be Lynk & Co's expectation that it will be able to price the car competitively because it will cut out most dealer costs and sell many of them online. This strategy could work because there is great appeal in buying a car whose reputation for quality and safety will get a boost from its close association with Volvo.

The Lynk & Co 01 will initially only be sold in China, which means it will be a while before it becomes a truly global brand. But company officials are confident that international expansion will follow the China launch.

Lynk & Co 01 won't be available as a full electric vehicle when it launches in China, which seems a missed opportunity in a market where EV sales are booming today. But the brand is expected to catch up with full electric powertrains at a later date.

-By Arjen Bongard