Geely Auto's Baoji Plant.
Li Shufu, founder of Zhejiang Geely Holding Group, is a rising star in the global auto industry, with his scores of international deals prompting competition concerns in the West and drawing substantial praise in China. Though Li is currently jumping many hurdles in the West, people who know him well say he is a man on a global mission to save the traditional auto manufacturing industry.
He may not be as well-known around the world as some of the biggest names in China's corporate world - like the star founder of Alibaba Group Jack Ma Yun, who speaks fluent English and does not shy away from global media attention, or the outspoken billionaire behind conglomerate Dalian Wanda Group Wang Jianlin, who once vowed to prevent Disneyland Shanghai from making any profit for 20 years - but Li Shufu, the low-key founder and chairman of Chinese carmaker Zhejiang Geely Holding Group, is now a rising star in the global auto industry.
Recently, he oversaw a slew of acquisitions of stakes in everything from premium carmakers in Sweden to racecar manufacturers in the UK to a flying car manufacturer in the US. And last month, Li came under the international spotlight again after it was revealed that he had quietly secured a 9.7 percent stake in German carmaker Daimler AG, making him the single-largest stakeholder of Mercedes-Benz's parent company.
The stake, which was worth about $9 billion, was the largest investment in a global carmaker by a Chinese company.
After the move, which reportedly caught German regulators by surprise and further exacerbated already-rising competition concerns among European officials over Chinese investments overseas.
Geely Auto's Linhai Plant.
People who know Li describe him as a successful businessman with a set of international deal-making skills whose global ambitions are driven by a personal passion for making better cars rather than by stints that cut through fair competition to gain an advantage over global counterparts. Chinese experts also refute conspiratorial claims that suggest Li's venture is a government-supported effort to transfer technologies in order to help the Chinese auto industry.
Personal passion
"Li Shufu has passion and determination. He has spent so many years focusing on making cars," Li Daokui, an economist at the prestigious School of Economics and Management at Tsinghua University, said during a panel discussion on March 2.
Growing up in a rural area in Taizhou, East China's Zhejiang Province, Li Shufu has always had a passion for business and mechanics. He started his first business as a photographer at the age of 19 and quickly learned how to buy different equipment and assemble a camera.
Though he has sold building materials and invested in real estate, it was in mechanics that Li found his true passion. Before founding Geely in 1994, Li Shufu had created successful businesses in refrigerator and motorcycle manufacturing, through which he accumulated the capital and resources for Geely.
Yao Jingyuan, a researcher at the Counselor's Office of the State Council, China's cabinet, said that Li's passion for making the world's safest and most environmentally friendly cars is behind his success.
"To become successful in anything requires passion and idealism," Yao, who has known Li Shufu since the early days of his venture in the auto industry, told the same panel discussion on March 2.
In an interview with Zhejiang Daily newspaper on March 5, Li said that "I hope Geely can make cars that can drive themselves, repair themselves, charge themselves, become our secretary and security guard, won't hurt people and won't pollute the environment."
While Geely's overseas acquisitions could help the company for now, that's not what he is after; he wants a long-term strategy to tackle profound changes in the auto industry and rising competition from tech companies, panelists noted.
"The international community has increasingly become a community of a shared future. Facing global economic development trends and rising competition, no country can stand unscathed. This is also true for the global auto industry. Rising to meet the changes by joining hands and coordinating development is the only way out," said Wu Yingqiu, CEO of Global Auto Media Group and a veteran auto industry observer.
Geely Auto's Chengdu Plant.
Business acumen
"Why I call Li Shufu a strategist? He grasped a consumption upgrade in China in the 1990s: from focusing on food and clothing to housing and travel, and then swiftly entering the auto industry," Yao said.
The manufacturing of Made in China cars by private companies back then was like a dream, because the Chinese auto industry was dominated by State-owned companies and Chinese-foreign joint ventures, said Shui Pi, editor-in-chief of Beijing-based China Times newspaper, at the same panel discussion.
"Twenty years ago, if you wanted to manufacture cars, you needed at least 10 billion yuan [$1.58 billion], or you wouldn't even think about," Shui said. "Li Shufu didn't have 10 billion yuan but he was able to integrate capital and production capacity resources."
Shui, who has known Li for over 20 years, said that during the acquisition of Volvo Cars and the stake in Daimler, Li also used his way of finding and integrating resources.
In the Daimler deal, Li used a shell company registered in Hong Kong, Tenacious3, which assembled an international group of facilitators, including financial heavyweights Morgan Stanley, Bank of America Merrill Lynch and global law firm King & Wood Mallesons, Reuters reported on March 2.
The move helped Geely to quietly acquire the stakes without violating any regulations or provoking regulatory scrutiny in Germany.
Looming hurdles
However, despite his proven international deal-making skills, "Li is now facing problems. His acquisitions in Europe could encounter resistance from traditional values [in Europe]… for example, [Europeans] believe there should be no mergers between competitors," Shui said. "They can't understand why Geely would acquire both Volvo and Damiler. But in China, we think 'why not?'"
Shui added that the rise of protectionist sentiment in the US and Europe could also curtail Li's plan and other Chinese businesspeople's overseas ambitions. "Europe is even more conservative than the US, so when they see outsiders like Li Shufu foray into their world, it's normal for them to raise their eyebrows and strengthen scrutiny," he said.
Yao also said Li Shufu will be able to jump these hurdles as he has done so before. "Many people in China first had doubts about Li Shufu when he acquired Volvo. They said because Li was once a farmer from Zhejiang who went on to 'marry a European prince,' things wouldn't work out. So what? Chairman Mao started off as a farmer," he said.