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Geely to run Volvo as an independent brand

Geely to run Volvo as an independent brand

Published: 26 Dec 2009 08:56 GMT+01:00
Updated: 26 Dec 2009 08:56 GMT+01:00

Volvo will remain intact if Chinese carmaker is successful in its bid to purchase the Swedish brand from US auto manufacturer Ford, according to Geely's top executive, who was quoted by the state-run Chinese media on Friday.

Geely founder and chairman Li Shufu said Volvo's existing production, research and development facilities, union agreements and dealer networks would be left unchanged.

"If the deal succeeds, nothing will change for Volvo, except the boss turns to Li Shufu," Li was quoted as saying by Xinhua news agency.

"Volvo and Geely will be two independently managed brands."

Geely, one of China's largest private carmakers, and Ford announced Wednesday they had agreed on the main terms of the sale of the Swedish automaker, with a final agreement expected to be signed in early 2010.

Earlier this week, Ford's announcement was greeted by skepticism among Swedish media, who speculated that Chinese ownership would damage the Swedish auto brand.

TT/Charlotte West (news@thelocal.se)

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Your comments about this article

09:44 December 26, 2009 by BIL101
If it's true, those who were skeptical among Swedish media and speculated that Chinese ownership would damage the Swedish auto brand should feel shamed! All swedes should appreciate what Geely have done and is about to do. It's chinese who saved your iconic Volvo, (hopefully not just for a while.)

I'm happy to hear this!

God bless Li Shufu!

Now the negative swedish media can shut up!
10:04 December 26, 2009 by krigeren
@bil101 Exactly.

Geely will be good for the Volvo brand...whether it is good for Sweden or not is a different story.
11:46 December 26, 2009 by pervanet
To us of a certain age (I am 60 years of age) living in the West ( I live in Greece), Volvo has for many years ( to the present day) been synonymous with Reliability, Safety, Craftsmanship, Innovative and clever Design reflected throughout most of its models.

In view of the latest news of the transfer of ownership to a car manufacturer catering for a market of gigantic proportions (thus numbers above quality) I would like to hear from top management (wherever they may be sitting) to the last operator on the production floor, if their intention is to safeguard the Volvo reputation and spirit . Volvo cars have been most desirable objects to own and drive (around Europe at least).

I am the proud owner of a Volvo XC70 Ocean Race vehicle. It is an amazing product of Design and Engineering Made in Sweden.

How much proud wound I feel with the label "Made in ............." stuck on the cars' beautiful body?

God Jul (Kala Hristoughena - in Greek)
12:39 December 26, 2009 by livinginsweden
#3 pervanet

I am 90 so what. Do you actually think that the chinese and Geely are going to spend a couple of billion dollars to destroy the volvo reputation.

Are you so stupid as to think that someone would invest billions of dollars to destroy the brand? Have you drunk too much ouzo?

Sorry to use hard words ,,, but your comments think that the chinese have more money than brains.....

When you invest billions on a business.... you want to create more success and improve the brand reputation further ... because the previous owners failed to...

Make volvo better and more competitive, etc.....

So think before you write so much krap ..... who cares about the XC70 or where it is made ..... .... i rather hear some common sense from you.

I buy things because i like it and i like the price ... not the brand or where it is made .... i dont fall for the marketing BS. I dont buy a SAAB becos some doctors or lawyers buy them or drive them in some hollywood movies ... .... they are not the smartest people on earth .... a few are .. but 99% of doctors prescribe aspirin for headaches everyday .... whats so clever about that?

ha ha
14:34 December 26, 2009 by falcon
Geely makes terrible cars -there is no way the can't run Volvo. Only way to make the investment pay is to move to China to take advantage of low labor costs.

This is so sad.
15:19 December 26, 2009 by livinginsweden
#5

Really?...... have you seen the geely's secret bus plan?

ha ha
16:11 December 26, 2009 by skyscraper
u guys r jealous why chinese business is expanding..dont sell them bcoz they r not pressing u..the thing is they have money so they will invest somewhere..if u dont sell them they r gonna buy somewhere else...its not only volvo,one of ailing swedish brand, in the market..so be realistic..
17:52 December 26, 2009 by ingvar
Whatever they say now, they soon will face the necessity to move manufacturing to China (at least partially). I don't think Chinese management is so much better than American that they can reduce expenses [i]in situ[/i].
19:05 December 26, 2009 by volvoman9
To imagine that a corporation especially one in a quasi communist country is going to be entirely honest with the public is naive. Corporations are and have always lied to the public in the pursuit of profit. It makes sense to leave Volvo in Sweden for the time being but changes are inevitable and will occur over time. No one can say how much or little success this venture will have but change must occur.

Purchasing established technology is a the short cut to market share. This is where the interest truly lies. China is the most prominent emerging manufacturing power today and will probably remain so. They have a captive work force and safety and pollution standards that date back to the beginning of the last century for the Western world. They are still behind the curve in technology of all sorts but are rapidly gaining on us.

Western corporations are clamoring to find a niche in a burgeoning consumer market because our countries have become consumer rather than production based. Business will always try to maximize profits as surely as consumers will always look for the lowest price.

The real tragedy here is that corporations have been allowed to destroy the competition. It matters not that the competition is small in scale; only that there is none. Volvo and Saab have always appealed to a small segment of society that appreciates the genius and style of the Swedish approach. If they were to be content to remain as such and enjoy a smaller market share then they would probably survive as they are. However one only needs to look at what happened after they were purchased by larger firms. They tried to find a place in a market in which they didn't belong. They were forced to compete on a scale that ignored their philosophy and and roots and targeted a larger audience. Ultimately this led to what we have now. They are becoming or have become irrelevant in the industry. We as consumers are allowing corporate greed and philosophy to drive our choices and we probably will lament this some day.
19:11 December 26, 2009 by pervanet
Mr livingsweden the level of both your language and the level of your arguments and reasoning is so high and intellectually so deep and elaborate that simple minds like mine fail to reach.

But please make sure that next time you buy your expensive hand made Swiss watch that it is engraved with " Made in the Philippines".

Or your classic "Abba" sill produced in say ......Azerbaijan for that matter.

PS. If you are 90 for sure you don't care where your next car is produced.
21:28 December 26, 2009 by livinginsweden
#10

I dont go into buying expensive watches or expensive jeans or shoes to show off or impress superficial people .. i have clock in my simple mobile phone... and listen to the radio for abba, metallica, etc...

I own a car but i don't drive it ... i use metro, train, walk or cycle ......

and I dont care how long I live or what my next car is either ....

ha ha
21:38 December 26, 2009 by pervanet
The discussion will resume when you learn proper English.
22:32 December 26, 2009 by uunbeliever
To pervanet. You are a rascist. And as a native english speaker I would have to point out the many english mistakes in your comments. How about "made on earth" you xenophobic old fart!
23:28 December 26, 2009 by Luke35711
These developments have great potential to be mutually beneficial for both Volvo and Geely, Sweden and China. All parties have a fantastic opportunity to learn from each other, respecting partners' cultures and accomplishments. The world will be watching closely. Indeed, this is likely to become a case study in business books of future generations!
01:09 December 27, 2009 by 2394040
Anything said now is subject to change later on. Let's see what the situation is a few years down the road. I doubt that anyone expected any major changes in a short period of time. I still believe that, over the long haul, Geely will not tolerate a union.
05:54 December 27, 2009 by zhqwang
I think that volvo will have a good future. Please believe me. I will not say these words if the state-owned companies of china buy volvo. geely is private company, do you know that there are a large improvement for private company? such as huawei,BYD,Wanxiang etc., they are all good private companies. Do you know there are only less than 30 years history! Of course I don't like the state-owned companies. I will buy volvo's car if geely buy volvo.
11:32 December 28, 2009 by Bender B Rodriquez
I don't doubt the Geely will run Volvo as an independent brand. Geely is a quite young company and they need the know-how of an established reputable car maker. My guess is that Geely will use Volvo technology to improve the Chinese brand and to finally be able to market their cars in the low price segment of the North American and the European markets. Volvo will be their answer for the medium-high priced cars. To discontinue the Volvo brand or to move production to China would be a waste of their invested money, so I doubt that will happen.
16:00 December 28, 2009 by steve_38
All those who slag off the Chinese need to read the press. Today it was announced that China has just opened the fastest train service in the world over 200mph.

30 odd years ago cars made in Japan were a joke. Taiwan is the biggest manufacture of cycles and leading the technology race in this area.

Simply saying that the Chinese will use the "Swedish superior (Ford)" technology is stupid and crass.

Volvo cars are at least 10 years behind BMW and the other German car manufactures in engine technology, before you ask I drive a 2009 V70 the tractor engine (D5) is 15 years behind the BMW 2.5 Diesel engine. This is the problem not the Ford or GM.

Volvo cant survive by itself the best thing may be to be part of Geely for a long term Volvo brand with some cars built in Sweden and the rest built in China.

Pretty much anything electrical is made in China including some very complex equipment.

I would thank Geely for buying Volvo it probably is the best move in a very long time.

My experience of working in Sweden the problem normally is the weak and hopless management. From what I hear Volvo is the same, incapable of making desicion unless forced on them from the USA.
17:26 December 28, 2009 by Bender B Rodriquez
"Simply saying that the Chinese will use the "Swedish superior (Ford)" technology is stupid and crass."

Thinking that has something with nationality is also stupid and crass. Geely is a young company. They already tried once to market their cars in North America, but failed due to not meeting the emission and safety standards. What they need is to become better in a short time and the best way to do it is to buy a company like Volvo and learn.

Huawei does exactly the same: In just a few years they have gone from being a small player to being Ericssons main competitor. They would not have done this so fast without aquiring companies and recruiting staff from companies like Ericsson.

This has nothing to do with nationality. Geely wants to learn from Volvo just like Huawei learned from massively recruiting Ericsson employees.

Thinking that Volvo has nothing to contribute technology-wise is stupid an crass. I'm sure that Geely also would like to buy BMW, however they are not for sale and the price tag may be too high.
23:54 December 28, 2009 by Brucelee@stockholm.sweden
It is pure business, please think in that way, and Geely may sell it few years later, who knows.
06:18 December 29, 2009 by dtroiani
It was simple. Combine Volvo and Saab.Borrow money from Ikea giant. Sell the more efficient models from Europe that the Americans could never get.(Diesels and under 2.0 liter engines). Get rid of guzzler models.Make all workers stock holders.The Swedish govt. should have woken up!
07:24 December 30, 2009 by zhqwang
Please set your heart at rest, geely will love the brand of volvo for certain. I think that it don't cancel and sell volvo for ever. some cars of volvo will be produced in Sweden for certain. the rest will be produced in china.
18:18 December 31, 2009 by rumcajs
livingin sweden, "I buy things because i like it and i like the price ... not the brand or where it is made .... i dont fall for the marketing BS"... It's not that... a car is expensive and you'd like it to last as long as possible.

I understand both sides. I am not racist or anything... all my cars have been Japanese and they've been great, but I have never bough anything Chinese that lasted a "normal" amount of time. That is why some people don't like the Chinese purchase of Volvo.

In the other time Ford sold Jaguar to Tata and I haven't heard about any quality probs. So yes, why not... maybe the Chinese will be 4 Volvo like Tata for Jag..... I kind of sugar daddy as someone said the other day in another comment.
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