Market Overview - Malaysia's new vehicle market declined by over 19% to 52,414 units in February 2026 from 65,052 units in the same month last year, according to the Malaysian Automotive Association (MAA) [1] - The decline in February followed a 27% surge in January, attributed to fewer working days due to the timing of the Lunar New Year holidays [2] - In the first two months of 2026, the vehicle market increased slightly to 116,712 units, up from 115,501 units in the same period last year [2] Economic Context - Consumer sentiment has strengthened, reflected in a pickup in economic growth to 6.3% year-on-year in Q4 2025, up from 5.4% in Q3 2025, driven by stronger domestic consumption, investment, and exports [3] - The economy expanded by 5.2% in 2025, slightly up from 5.1% in 2024 [3] Vehicle Sales Performance - Light passenger vehicle sales rose by 1% to 109,117 units in the first two months of 2026 from 108,339 units a year earlier, while commercial vehicle sales increased by 6% to 7,595 units from 7,162 units [4] - Battery electric vehicle (BEV) sales surged by 154% to 9,870 units in this period from 3,850 units a year earlier, led by the Proton eMas 5 with 4,630 units [4] Production and Forecast - Vehicle production in Malaysia fell by 7% to 110,607 units in the first two months of the year, down from 119,540 units a year earlier [5] - The vehicle market is expected to rebound in March, but full-year sales are projected to weaken, with GlobalData forecasting a nearly 6% drop in light vehicle sales to 779,000 units in 2026 [5] Company-Specific Performance - Market leader Perodua's sales fell by 9% to 49,703 units in the first two months of 2026, despite launching the new Traz compact SUV and its first BEV model [6] - Proton reported a 58% increase in global vehicle sales to 33,399 units year-to-date, with the Saga being its best-selling model [6] - Toyota registrations rose by 13% to 13,591 units in the two-month period, aided by the introduction of new models [7]

Core Insights - The premium electric vehicle (EV) market in Europe is experiencing slower adoption rates as consumers transition from internal combustion engines to more affordable electric vehicles from Chinese competitors [2][3] - Despite the slower uptake, there is growing consumer interest in premium EVs, as indicated by a Bain & Co. poll showing a higher adoption rate in the premium segment [2][3] - Zeekr, a brand owned by Geely, is committed to delivering high-quality vehicles with advanced technology, focusing on the European market with a local management team [5][6] Group 1: Market Dynamics - The transition to premium EVs is hindered by the availability of more affordable options from Chinese brands, which are gaining traction in Europe [2][4] - European consumers are increasingly attracted to new Chinese brands that offer superior in-cabin technology compared to traditional European manufacturers [4] Group 2: Zeekr's Strategy - Zeekr has initiated its European expansion in Sweden, with a focus on adapting its products to meet local consumer preferences [5][6] - The brand currently offers three models in Europe: the Zeekr 001, Zeekr X, and Zeekr 7X, showcasing a commitment to the premium segment [5] - Zeekr leverages Geely's sustainable electric architecture to tailor its vehicles for European customers, ensuring that features like braking and infotainment systems are customized for the market [6]

Core Viewpoint - Geely Auto has proposed a non-binding offer to privatize Zeekr, suggesting a purchase price of $2.57 per share or $25.66 per American Depositary Share, aiming to focus on its core automotive business and enhance operational efficiency [1][6][11]. Group 1: Privatization Proposal - On May 7, Geely submitted a non-binding offer to privatize Zeekr, acquiring all outstanding shares and American Depositary Shares [1][6]. - The proposed purchase price represents a premium of approximately 13.6% over the last trading day closing price and a 20.0% premium over the volume-weighted average price over the last 30 trading days [6]. - Geely currently holds about 65.7% of Zeekr's issued share capital, and if the privatization is completed, Zeekr will become a wholly-owned subsidiary of Geely and will delist from the NYSE [6][11]. Group 2: Zeekr's Financial Performance - Zeekr is set to officially list on the NYSE on May 10, 2024, with a projected total revenue of 75.913 billion RMB (approximately $10.4 billion) for the year, reflecting a year-on-year growth of 46.9% [8]. - The gross margin for vehicle sales increased to 15.6% for the year, with a fourth-quarter gross margin of 17.3% [8]. - The net loss for the year was 5.791 billion RMB, a reduction of 29.9% year-on-year, with the fourth-quarter net loss decreasing by 72.1% year-on-year [8]. Group 3: Strategic Focus and Market Position - Geely's move to privatize Zeekr is aimed at deepening internal resource integration and enhancing operational efficiency, while maintaining distinct brand positioning and product differentiation [11][12]. - The company emphasizes the importance of collaboration among its brands to improve market share and technological innovation, with a focus on sustainable development [12]. - Geely's chairman has highlighted the need to adapt to market competition and economic conditions, aiming to create long-term value and establish a leading position in the global smart electric vehicle market [12]. Group 4: Future Goals and Challenges - Zeekr aims to become a high-end luxury electric vehicle brand with annual sales of one million units within the next two years [13]. - Despite positive reception in the market, Zeekr faces challenges in converting its good reputation into sales amidst fierce competition in the Chinese electric vehicle market [13].