Lynk & CO's quest to build a brand from scratch

Lynk & CO chief Alain Visser probably has one of the most fascinating jobs in the auto industry. The former General  Motors and Toyota executive is tasked with building a brand completely from scratch. Engineered in Sweden, built in China, Lynk & CO hopes to tap into a new vein of demand by taking the metaphor of a car as the ultimate "smartphone on wheels" to a new level. Connectivity and sharing will be the core differentiating feature from the start. Visser discussed the genesis of the brand with Automotive News Europe Correspondent Christiaan Hetzner.

Does the world really need another car brand?

Honestly, were you to ask me as an individual entrepreneur if I would start a business, would it be a new car brand, no it wouldn’t be. Looking at the mobility and connectivity needs globally, though, I am strongly convinced that there is a demand not currently being fulfilled by today's offer.

What approach will you take?

There are three ways to start a new company: you can take an existing business model and try to improve upon it, which is what the car industry has been doing for 100 years. You can create an entirely new desire, which is what Apple did with the touchscreen smartphone. Or you can identify a hole in the market where a need exists. I think Lynk & CO is somewhere in between the latter two.

Meaning?

There is a need to have a different type of mobility offer in the market place that is neither offered by the taxi companies or Ubers, nor by the OEMs and that's what we are targeting. We’re not a pure services provider like Uber, nor do I see us as a pure OEM that sells cars: we sell services based upon a product.

When will you reveal your model range and roll out plans for Europe?

While most if not all models will be offered in China, Lynk & CO's portfolio will not be the same elsewhere to take account of local market conditions: some cars sold in the U.S. will likely not be available in Europe and vice versa. Less is more. After our launch in China in November this year, we will most likely disclose more of the details of our portfolio plan for the coming two years, including for Europe and the U.S.

By the end of 2021 at the latest you want to sell half a million cars annually, how will that be split up by regions?

About 50 percent of the total volume will come from China and the other 50 percent split almost equally between Europe and the U.S. When we say "sold," we mean new cars delivered to a consumer in whatever contractual format and put into use - whether that is via subscription model, a sale, a lease or renting, we leave open.

And will the 125,000 European sales come mainly from Eastern and Central countries?

We are going to focus predominantly on Western Europe, since we learned it's the wrong strategy to test first in emerging markets. We have the confidence in our product that we can immediately start in the most competitive and strategic ones like Germany, and Berlin will be our European starting point just like San Francisco will be for the U.S.

Will you target conquest sales from premium or volume brands?

We haven't even targeted a specific brand, since we think many will come from no brand. I think we will have customers that never bought a car, people that so far used taxis or Ubers, because they will be buying mobility.

What will be the duration of your mobility subscriptions?

We will of course offer one or two year packages. There are however customers that don't want to lock themselves into a fixed contract, because they don't know what they are going to do next year. So, we will also give customers the choice to extend on a monthly basis.

How can you say that your distribution strategy doesn't threaten dealers when you plan to sell cars via a wholly-own retail showrooms?

It's very sensitive, I understand that. But if we create a new car brand, we need to differentiate ourselves and that is one way. Our business model does offer opportunities for dealers, just in a very different way.

What's your powertrain strategy for Europe?

We want to be ahead of the game and be simple in our offering so we will only sell cars that are hybrids, plug-in hybrids or pure electrics. There will be no models that run purely on combustion engines and we will not offer diesels. There will also be no manual transmissions.

How many of your customers will use your "sharing" button?

The uptake will be probably be low at the beginning, but it will come and we want to be first, since sharing is something where we want to stand out. Another connectivity differentiator will be offering services either first or exclusively by inviting developers to design apps for our open platform, but it’s too early to give concrete examples.

Your models are based on the CMA platform that will underpin the Volvo XC40. Could Volvo's CMA plant in Ghent, Belgium, build cars for your brand?

Our ambition is to have a global manufacturing footprint, so yes, it is an option given it’s technically possible. But are we working on that? No. Would the logistical costs from shipping cars from China exceed the extra production costs in Europe? We would need to look at that and we haven't done that work yet, since we currently only [factoring in] the Luqiao plant.

You worked for GM in Europe, where the U.S. parent company's domestic brand Chevrolet competed for years against its higher-priced European sibling Opel. Does Volvo have to worry about Lynk & CO?

We see no cross-shopping between the XC40 and our 01 and that's why the appetite to work together with Volvo is very high. Hakan [Samuelsson, Volvo Cars CEO] sees absolutely no competition from Lynk & CO, nor do I see from Volvo. Even if the cars are a similar level of technology, the brands are diametrically opposed.

Does offering one price throughout the euro area disregard the gap in living standards throughout various markets?

If that were true, then cars in Germany would be a lot more expensive. Yet they are among the cheapest because the competition is so high and the German premium brands push the prices down by fighting for volume. So, there is no correlation between living standards and price of cars.