Geely Holding Group chairman and founder Li Shufu said on Saturday that the global automotive sector is grappling with “serious overcapacity,” prompting the Chinese automaker to suspend new plant construction and expansion at existing facilities.
Speaking at an auto industry forum in the central Chinese city of Chongqing, Li said the company had decided to refrain from further increasing its production footprint. “The global automotive industry is facing serious overcapacity, and we will not build new plants or expand production at existing ones,” Li stated, according to a company summary of the event.
Geely, one of China’s largest privately held automakers, owns a broad portfolio of brands, including Geely Auto, premium electric vehicle maker Zeekr and Sweden’s Volvo Cars.
Li’s remarks come amid intensifying competitive pressures in China’s car market, the world’s largest, where a fierce price war has led to reduced margins and prompted many Chinese automakers to explore overseas markets. In response to the mounting price competition, Chinese authorities have urged automakers to slow expansion and avoid aggressive pricing strategies.
Several Chinese manufacturers—including BYD, Chery Auto, and Great Wall Motor —have pursued international growth by building plants abroad. Geely, by contrast, has opted for strategic partnerships. Earlier this year, the company announced plans to leverage Renault’s existing production infrastructure in Brazil and acquire a minority stake in the French firm’s local operations.
However, in April, Reuters reported that Chinese regulators had delayed approving Geely’s Brazil initiative. Geely responded by saying that “the cooperation with Renault in Brazil has been successful.”
Geely’s decision to hold off on further manufacturing expansion signals a more cautious industry tone as Chinese automakers weigh global ambitions against domestic market saturation and regulatory pressures.