(Yicai) June 9 -- Geely Holding Group has decided not to build any new plants as the world’s auto industry faces “severe overcapacity,” according to Chairman Li Shufu, head of the Chinese company that owns Zeekr, Volvo Cars, and Lotus Cars.

Geely is determined to avoid building redundant plants, Li said at the 2025 China Auto Chongqing Summit held over the weekend. Instead, the Hangzhou-based company intends to make full use of global surplus capacity and pursue pragmatic cooperation with its international peers wherever possible, Li noted.

This approach will allow Geely to tap into skilled workforces and mature quality-assurance systems overseas, while helping industry partners absorb surplus capacity -- promoting friendly, collaborative participation in the global auto market, he explained.

That will not only win Geely plaudits from international peers, but also help cultivate a positive image of China’s auto industry as it expands onto the global stage, he added.

The utilization rate of manufacturing capacity in China’s car industry, which typically topped 80 percent before the first half of 2018, has since fallen with the increase in plants turning out new energy vehicles but has remained above 70 percent in recent years, according to data from the National Bureau of Statistics.

A report by car intelligence provider LMC Automotive forecasts that global capacity utilization in the car industry could fall to 65 percent by 2028. If demand weakens further, the rate may dip to 60 percent, the report warned.

Editors: Tang Shihua, Emmi Laine