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Geely to sell one million Volvos a year: report
Volvo production facility in Chongqing

Geely to sell one million Volvos a year: report

Published: 11 Nov 2009 13:39 GMT+01:00
Updated: 11 Nov 2009 13:39 GMT+01:00

China’s Geely, the front runner to purchase Volvo Cars from Ford, wants to build a factory in China to help increase Volvo sales to one million vehicles, according to US media reports.

Volvo Cars, based in Sweden and losing money, produced about 400,000 vehicles last year under the ownership of US auto giant Ford, the Wall Street Journal reported on Wednesday.

The report, datelined from Beijing, said that if Geely, currently the preferred bidder, succeeded in taking over the company it intended to boost sales to a million vehicles a year.

It would achieve this partly by building a factory in China to make 300,000 vehicles per year and aimed at the local market, the report said.

Geely also has plans to develop two or three new larger Volvo luxury models in the next three to four years in its bid to boost global sales.

The Chinese automaker reckons Volvo can sell about 200,000 cars a year in China, compared with the 12,600 vehicles sold in China last year.

But a final deal allowing Geely to purchase Volvo from Ford remains a long way off, as the companies continue to grapple with the question of how much technology Ford is prepared to share with Geely, according to the newspaper’s source.

Also unresolved is what rights Ford may have to continue using Volvo’s technology and how the two companies would resolve any future disputes over technology.

TT/AFP/The Local (news@thelocal.se)

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Your comments about this article

14:09 November 11, 2009 by Nemesis
This is getting interesting.

That means 700,000 Volvo cars built outside China.

This could be very good news for Swedish manufacturing.
15:03 November 11, 2009 by bezjaj
In 2004 _ a Chinese Company bought the Korean car man factorsingsong
16:21 November 11, 2009 by samuel1
Yeah cool....now u can expect many volvos duplicates in the market

quality...well chinese products have always maintained great quality!
18:17 November 11, 2009 by calebian22
Just wait until the Chinese factory is up and running at full capacity and at a quarter of the operating costs. Don't worry Sweden, keep your head buried in the sand. Everything will be alright.
19:29 November 11, 2009 by aaww
well, if you look into the overall cost level, it's actually insane to manufacture basically anything in sweden.

so swedish better face the realistic world here, and plan ahead what you are going to do in the future. instead of fighting with Chinese or Vietnamnese in terms of production, maybe Sweden could be more focused on design and R&D, it's better than sitting and complain, doing nothing.

be aware that it's still going to be a capitalist world that everybody, no matter if they are Swedish company or not, will chase for the lowest cost and highest profit margin.
20:38 November 11, 2009 by karex
@aaww

lowest cost + highest profit margin = lowest quality...
22:07 November 11, 2009 by Marvino
I hope somebody at FORD realizes that they will shoot themselves in the foot if they sell Volvo to Geely. One day you will see on the streets of USA not only cloned Volvos but also cloned Fords.... with all Volvo patents (copies by Ford) gone down the drain quality wise...Just like the imitation Rolex watches and Gucci bags manufactured in Hongkong..
22:48 November 11, 2009 by peropaco
So now who will be making the fake volvo copies?
23:17 November 11, 2009 by Nemesis
@ aaww

Wrong.

Swedish manufacturing can show the world a thing or two.

The majority of posters on the local like to be negative against Sweden, which is probably why the Swedish Democrats love the local, but on average they are completely wrong.

http://en.wikipedia.org/wiki/The_Local

The Swedish can manufacture and outcompete if given a level playing field.

So many assume the Swedish will fail.

I have got to know Swedish people, since moving to Sweden.

They seem to be better at winning, than failing.
02:03 November 12, 2009 by Marvino
to peropaco #8

The Chinese themselves will make the fake Volvos, because they have in the past, and will in the future ignore Patents...In their communist world, there is no respect for patents, no more than for the rights of authorship...It all starts with the concept of property ownership, which does not exists in the communist dogma. The Chinese have somewhat bent the rules in the last few years, and their undeniable progress shows it. Yet, old habits still prevail with the comrades...
02:19 November 12, 2009 by 3rdjerseyman
I've been a Volvo sales and marketing representative in the US since 1980, and I assure you that the American Volvo loyalist will reject Chinese ownership of Volvo.

The Chinese make a mockery of free-trade. They insist on ownership of the production facilities for manufacturing items and as quickly as possible, steal the technology, refuse to import and demand trade concessions from all their "partners".

They also break agreements already concluded and cheat their partners whenever they can. Ford should just keep Volvo.
02:40 November 12, 2009 by Marvino
Amen 3rdjerseyman...you hit it on the nail.
06:25 November 12, 2009 by mcg
@3rdjerseyman

Very true. My company learned this in practise. We do not manufacture or sell in China now.

In our experience and similar from talking to other Swedish/Swiss companies in China - the Chinese seem to feel that it is basic business practise to try and pass off failed components into the supply chain (even the EU marked palettes were just poor wood, with a copy branding - often unfumigated)- if they are caught, there is not apology. Very little integrity.

We had to sent Swedes over to the Chinese Suppliers, to sit and monitor their production lines. Cost Efficient?

If you factor in the fail rate of unmonitored suppliers - the components are not that cheap, especially with recall/repair costs - and bad customer relations.

We do not problems anywhere like this with EU based production.
07:00 November 12, 2009 by Marc the Texan
I'm now thinking that Ford will hold on to Volvo. The car market is picking up again and they made a billion dollars n the most recent quarter. They are probably looking to gain some leverage with labor with the drawn out threat of being sold to China. That way labor will be satisfied with less and just be thankful for a job.

I could be wrong, but that's where I think it's gong since the market already bottomed and is rebounding now. Kind of stupid to sell Volvo if you don't have to and I don't think they have to any more.
09:31 November 12, 2009 by bjinger
to #10

your story can only mislead those who have no common sense. people here seem to have little knowledge about the changing world and forget the history of the developement of the western industres. Such words like "fake, steal, low quality,conmmunist" etc, we can only see a picture of an angry old man shouting in the street.
11:07 November 12, 2009 by aaww
i agree with you "bjinger"

the world has changed totally, and it will diversify even more in the future.

i read people say "The Swedish can manufacture and outcompete if given a level playing field", which sounds strange to me, in the capitalist world, you basically need to fight for yourself and creat your own playground, it's just impossible to sit around and ask government ruling or bailout. due to the financial situation of the government themselves, this will very unlikely to happen.
11:55 November 12, 2009 by Dr. Dillner
Maybe Geely can put some of those fine Chinese tires on them too, the ones that have the world's lowest quality control!
13:17 November 12, 2009 by livinginsweden
So interesting to read the comments and also the article ....... no such 'racist' comments were ever written when Ford bought Volvo .. but now we see racists comments in other disguises written about Geely.

If Volvo has such wonderful technologies... etc.. etc. . why is Ford offering it up for sale? .. and why are so few stepping up to put their money where their mouth is? Why is no one condemning Ford for buying Volvo and then throw off Volvo by the road side after exploiting it and casting it away like a used and soiled diaper.

Technology is only good when it sells ... a good idea or technology that does not find customers is a lousy idea! That is free market. Volvo is way behind other brands in term of green technologies, etc....... so don't get buried in your sentimentalism ... and biofuel is not green by the way ... it is burning the food that should be feeding some poor children in some developing countries and it is grown on some virgin forest cleared to grow the biofuel.

Look under some of the most famous brands and you see 'made in china' on the label..... so keep up with changes in the world before you start posting some out of date cold war comments that reflect your biases and ignorance.

And a short comment about copies and pirates ..... do you mean that the Chinese are doing what Pirate Bay is doing? ha ha ..

I love Sweden ... but lets get the facts right......
13:59 November 12, 2009 by spy
livinginsweden

You are wrong on every level. . .

Racism?? - No this is about brand perception and company direction. These guys are corporate savages.

Ford was universally popular? - No many people predicted that a giant US corporation would not be good for Volvo.

Technology? - I didn't understand your point but anyway no one yet knows what intellectual property is offered in the Volvo deal.

Biofuels are bad? - Yes and No - Biofuel is a generic term for many different fuels. . . Many have been proven to produce significant CO2 savings. Your regurgitated 'food vs fuel' argument is naive and wrong. By the way many of the studies that came up with these findings were actually funded by oil companies to con stupid people into buying more oil. .

Facts right? - Not even close
14:17 November 12, 2009 by livinginsweden
Spy .. #3rdjerseyman

Your comments are typical rhetoric.... 'you are wrong' ... without any backup ... and lump me with the oil companies ... as if I am part of the gang ... might as well call me a radical muslim .... to complete the picture ... (in fact I dont even own a car)

Branding .... yeah I know something about branding ..... blind following the blind .... girls following their favourite pop stars...

Technology ... if Volvo tech are so earth shattering and good ... then the q to buy Volvo would be so long ..... and be the most profitable company ....

Biofuels ... yeah blame everything you dont agree with on studies sponsored by oil companies .... no they were sponsored by green NGOs. Google it yourself and see what Greenpeace have to say about biofuels .......

#3rdjerseyman

1 The US is the No1 importer and user of Made in China products .... that is why USA owe China trillions of dollars..... and Obama is going to China this week to learn some economic lessons .... .. and he is probably going to lecture China on Human Rights and blame Gitmo on Bush.

2 If what you say about American loyalty to Volvo is true, what happened to American loyalty to GM? Toyota and other foreign brands have taken over the car market in the US and send all the American brands (except Ford) into the have beens ...

3. Behind every major popular brand from the Thinkpad to SonyEricsson, etc.. is a 'made in china' label .....

4, I think it was GM who broke the agreement it had with Germany pertaining to sale of Opel .... Intel charged by the NY Attorney Gen for anti-trust ....,

Ha ha
14:32 November 12, 2009 by spy
livinginsweden

You know bu99er all about the auto industry are you over here teaching???
14:40 November 12, 2009 by livinginsweden
Spy ...

again make a slamming statement .... when you don't even know who I am ... Maybe you know more than I do .. maybe not ...

Anyway, here is a link to greenpeace ... proving that you dont know much about biofuels ...

http://www.greenpeace.org.uk/blog/climate/biofuels-green-dream-or-climate-change-nightmare-20070509

No I am not a teacher .... that reminds me of a saying ... 'those who can .. do, those who can't .. teach' ( no offence meant to teachers)

Ha ha
15:20 November 12, 2009 by spy
livinginsweden

The article you point to was from 2007. . .And although Greenpeace has some admirable qualities I would not want them to be responsible for running Europe.

Judging by your own (slamming) comment: 'biofuel is not green by the way' you don't have a complete understanding of this complicated topic.

Bioethanol, for instance, CAN be made from a variety of different things from off-cuts of wood from the timber industry to lab grown algae - to my knowledge we don't feed 'poor children in developing countries' algae or wood chips and therefore this is unlikely to impact upon them.

Anyway I don't want to start a debate about biofuels because we could be here all night, but I will say that for every expert and article critical of biofuels there are many others stating significant benefits in the near term. The simple fact is that some biofuels are better than others and all biofuels can be made in good and bad ways.

Are you sure you are not a teacher?? You just had that sort of tone.
15:38 November 12, 2009 by glamshek
I think China attains the production facilities , take the technology and then beaks off from all the agreements and negotiates for trade concessions. #3rdjeseyman is right.

But the question is whether Ford can hold onto it?

I think its hard now.

This also can help Chinese economy more than Swedísh and American
16:15 November 12, 2009 by microping
To all those who worried about the situation that Geely will buy volvo:

It is so laughable to see all you guys think that Chinese can not make good car.

As a Chinese I personally believe that acquiring Volvo from Ford will be a win win situation for both Volvo and Geely. Volvo has a outstanding quality, especially on safety and China has a huge market. Nowadays many people are rich and we are the second luxury good market on the world. (Although it is not good to become top on this kind of market).

Come to the worry about Chinese product. All those Chinese products exported to Europe are eligible, if you have bought something bad, you should blaim your import policy but not the country make the product. I have been to 'Tiger' in Lund for several times, there are plenty of people and most of the product are cheap and made in China. Actually it is funny to see if all those kind of store is closed and where you will buy those goods.

As a company, the only thing they care about is making money, that is why ford gonna sell Volvo car business because it keep losing money on that. If I am the board of Geely, I would withdraw my bid on Volvo now because maybe I can get it cheaper late when Ford feel that it can not afford the expense anymore.

GM bought SAAB and make Turbo available on other brands under it and then sell the SAAB, why nobody blame on that? Are you all blind?

Volvo's reputation is rising in China and if Geely doing well it will make money on that and then Volvo can have more money on R&D to develop more safe car in future, so why not?

To "spy", I have reported abuse for the word "savage" you use.
16:21 November 12, 2009 by spy
microping

If you had read my post correctly you would see I was referring to Geely as 'savage' in the corporate sense.

See the definitions for savage:

Barbarous: (of persons or their actions) able or disposed to inflict pain or suffering; "a barbarous crime"; "brutal beatings"; "cruel tortures ...

feral: wild and menacing; "a pack of feral dogs"

attack brutally and fiercely

a member of an uncivilized people

barbarian: without civilizing influences; "barbarian invaders"; "barbaric practices"; "a savage people"; "fighting is crude and uncivilized especially if the weapons are efficient"-Margaret Meade; "wild tribes"

criticize harshly or violently; "The press savaged the new President"; "The critics crucified the author for plagiarizing a famous passage"

beast: a cruelly rapacious person

ferocious: marked by extreme and violent energy; "a ferocious beating"; "fierce fighting"; "a furious battle"
18:35 November 12, 2009 by livinginsweden
Spy..

No i am not a teacher .... today's kids are too un-managable ... that would kill me ...

Well ... biofuels ....... majority are from corn or palm oils.... sure there are other forms ... but not economical and not widely used .... and South Americans main food of corn are being burned in cars in the US ... and the price of corn sky rocketed beyond the affordablity of S Americans... and they start to starve .. until the economic crash ... now all the ethanol plants are going bankrupt and thank god ... the poor can buy corn again .

Anyway ... been fun chatting.....
20:29 November 12, 2009 by spy
Did a muesli-mouthed, sandal-wearing, margarine-eating, basket-weaving, car-hating, propaganda-swallowing teacher tell you that?
21:10 November 12, 2009 by livinginsweden
No .. my chocolate mouthed, bare foot, godis eating, xbox playing, gun loving, coke swirling .... young 9 yr old son .... pretty smart kid .. he is

ha ha
21:10 November 12, 2009 by karex
@livinginsweden

FYI, the only country who has corn as a major staple is Mexico who is not even part of South America, but Middle America.

It's the Americans who eat a lot of corn, and the process of turning corn into ethanol creates greenhouse gases, aside from being very expensive.

Children are not starving. Virgin tropical forest is not being cut down to farm corn or anything else for two reasons: 1. it is illegal, 2. the rich top soil of a tropical forest, at least in the Amazon is very shallow and cannot sustain agriculture.

Forest is being cut by illegal loggers and ranchers. A farmer would be stupid to do that: he can't just move his crop to another field when he hears the cops are in the area.
21:33 November 12, 2009 by livinginsweden
Karex ....

Thanks for your joke ... it is funny ...

Ha ha
21:39 November 12, 2009 by karex
@livingin sweden

How many years have you lived in South America?

I have lived more than 30

How many years have you worked in the auto industry?

I have worked almost 30
21:50 November 12, 2009 by livinginsweden
Karex...

What has living in S America for 60 years got to do with it?

What has working in the auto industry for 60 years got to do with it?

Does someone who spend twice as long in school than everyone else.... and twice as long as everyone else in college .... does it mean that he knows twice as much as everyone else?

ha ha
21:54 November 12, 2009 by karex
Nope, just means personal experience and being a live witness teach a lot more than propaganda on the internet or anywhere else.
22:04 November 12, 2009 by livinginsweden
Karex ...

Please read these three stories....

Rise in food price .... World Bank

http://siteresources.worldbank.org/NEWS/Resources/risingfoodprices_backgroundnote_apr08.pdf

Biofuel dilemma for Brazil

http://www.worldfoodprize.org/assets/YouthInstitute/07proceedings/Johnston_Brown.pdf
22:16 November 12, 2009 by Tomandjerry
i dnt understand why people are talking stupidly about poor quality of chinese products....

no one ever forces you to buy cheap chinese things at low prices...you want good quality, pay more, please...if you just expect to spend one dollar to get a product that is as durable as something that costs 10 dollar...oh, please wake up..you stupid head.

btw, many westerners would love to buy fake Louis Vuiton, Prada..ect in Bejing or Hongkong....
22:20 November 12, 2009 by livinginsweden
Tomandjerry....

You make sense ..... but they are not talking stupidly ...... it is subliminal racist talk ....
22:35 November 12, 2009 by karex
links lead nowhere.

Biofuel in Brazil comes from sugar cane. Not corn. Turning any other crop into requires to change that crop into sugar first (the greenhouse emitting process) and THEN to ethanol.

Sugar cane is already sugar...

The basic food staple in Brazil is rice and beans, sugar plays no part in it. What CAN raise in prices in Brazil is the cost of the cachaca or local spirit made from sugar cane, not the food at least not because of the biofuel industry that creates a lot of jobs.

The people who don't have enough to eat in Brazil are those families that earn less than minimum wage and then decide to have 15 children.

Then corrupt politicians use this as an excuse to milk the Federal Government out of millions in taxpayer's money to fund mega projects that sometimes never even get started and the money ends up in numbered bank acounts offshore.

These people become disillusioned and move to the big cities thinking that it is a miracle cure for the good life. But they can't get a job for the simple reason that most can't write their own name, much less have any trade experience to speak of. Then they end up in slums, swell the ranks of criminals, etc...

I can go on and on but it is really pointless.
07:27 November 13, 2009 by spy
Karex

I completely agree with you and as I am sure you know the bioethanol in Brazil is the most efficiently produced in the world - they have no oil they have been producing it for over 30 years and have got rather good at it.

I have seen all of these arguments before: 'food for fuel' 'rise in in food prices' and 'biofuel deforestation' etc. and many of them just do not hold water.

As I said before - some biofuels are better than others, some are made more efficiently than others and there are good and bad examples.
12:51 November 13, 2009 by karex
@spy

Actually, a little-known fact is that Brazil does have oil, lots of it. They have several off-shore rigs. One of my mother's cousins was a specialist maintenance diver for one of these rigs for many years. But most of the oil is in the Amazon Basin. Brazil calculated the costs of extraction and decided that it was cheaper to import than the immense costs of setting up rigs while protecting the fragile ecosystem of the tropical forest. US oil companies have been trying for decades to get their hands on the oil - offering to extract for Brazil. As usual, and like they have done with the Arab nations, they then keep the bulk of the product and throw back some scraps. Brazil refuses. They'd rather see it rot.

Another little-known fact is that it's the US who is the largest producer of ethanol from corn. Not only that, the US has been controlling grain prices for decades. Before they found another use for the grains, especially corn, when they didn't like the price on the market, they simply dumped the surplus in the Atlantic Ocean, instead of donating to war-torn African countries, for instance.

As for World Bank reports. Most are biased towards the lobbying of their richest members and their personal interests.

There is no susbtitute for "being there" and seeing things for yourself. At least you know that your own eyes you should be able to trust...
13:15 November 13, 2009 by spy
I understandand fully endorse your points but I think we are splitting hairs on Brazil - they did not have cheap oil which is why they opted for bioethanol.
23:52 November 13, 2009 by karex
@spy

Yes, I know, that's what I meant about being too expensive to extract the Amazon oil.
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