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'Volvo production to remain in Sweden': Geely

Published: 01 Feb 2010 10:35 GMT+01:00
Updated: 01 Feb 2010 10:35 GMT+01:00

Chinese car maker Geely has declared its intention to keep Volvo production in Sweden after completing the purchase of the company from US auto giant Ford, the Financial Times reported on Monday.

"We want to be careful not to damage the Volvo brand," Freeman Shen, Geely's vice president for international operations, was quoted as saying.

"We don't want the image of a luxury car made in a third world country. We want the image of a European luxury car, albeit owned by a Chinese owner."

The Local reported last week on Geely's plans to make Volvo profitable by 2011 by producing large numbers of cars at a factory in Beijing.

But the firm also stressed that it still wants to keep Volvo Cars’ production facilities, head office, and development division in Sweden.

Unions have previously expressed their concerns about Geely as Volvo’s new owner, both due to fears about jobs moving to China and because of the risk that suppliers may restrict Volvo’s access to the latest technology due to fears that it will be copied.

Ford, which bought Volvo in 1999, put the company up for sale in 2008.

The deal with Geely is set to be signed before China's lunar new year holiday begins on February 14th, the Financial Times reported.

Volvo Cars has 22,000 employees worldwide, including 16,000 in Sweden. The deal with Geely has raised fears among trade union leaders of cuts at the firm.

AFP/The Local (news@thelocal.se)

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Your comments about this article

13:33 February 1, 2010 by calebian22
"Chinese car maker Geely has declared its intention to keep Volvo production in Sweden after completing the purchase of the company from US auto giant Ford, the Financial Times reported on Monday."

The road to hell is paved with good intentions. That's also assuming this is not a bold faced lie. Geely will do what's best for Geely, not Volvo or Sweden. The union leaders fears are not groundless.
17:10 February 1, 2010 by 2394040
Companies have been known to change their minds.
17:57 February 1, 2010 by Renfeh Hguh
Yes "Geely will do what's best for Geely"... They spent a lot of money buying an European luxury brand and will not screw up their investment by moving production to China.

The global market and Volvo's current product range does however give Geely the scope to develop a Volvo that will compete against cars like the Mini, Fiat 500 or even the Smart car. I expect Geely to develop the car in Sweden and then build it in China, initially as an Asia only model and then eventually a world model once the build quality is up to scratch.
20:33 February 1, 2010 by volvoman9
You're all correct. It would be foolish to do anything right away but time will tell where the cars are made. The real issue will be the one of a quality product. If Volvo can regain their edge in quality, innovation, and safety then this will be a winning combination. Fortunately only the Swedes know how to do this right now.
21:14 February 1, 2010 by Marvino
The more Geely states they will keep Volvo in Sweden, the less I believe them. It all sounds like a well orchestrated PR campaign to convince potential Volvo buyers of their good intentions. Volvo will become a forgetable brand in the hands of Geely. And FORD's destiny after the sale will not be much better. They will loose the European market hopeing the sell millions of cars to Chinese customers. And they probably will. But on the long run, the quality of their cars (whatever they copied from Volvo...) will go down the draint and heir brand will become forgetable even in the USA.

I still hope that somebody at FORD will realize all this and stop the negociations with Geely. After all GM turned around and kept OPEL, and managed to sell SAAB to a European company. Why is it that FORD cannot do the same thing ?
22:53 February 1, 2010 by Bourker
The Volvo sale will show the limitations of Alan Mulally at Ford, he has done a good job at turning them around but lacks the vision to move them forward. This recession will end and in a year or two the demand for premium brands will take off leaving Ford with nothing to sell and depending on low a value high volume product line.

Volvo is a quintessentially Swedish brand and no matter what Geely say Chinese ownership will deteriorate this. Once the supply of Ford technology ends it will be game over, I can't believe that Swedish people aren't more active over this, your two great motor brands might be history within 10 years. Volvo Trucks should have take it's car arm back into Swedish hands.

The only hope now is the US / China disagreements over Google censorship and arms sales to Taiwan might bring pressure on Ford to pull out of the deal.
02:20 February 2, 2010 by volvoman9
If you think Ford will do the right thing you are terribly naive. Ford's profits for the year ending in '09 in China were up over 40%. The market they want to dominate is in Asia not Europe. They just sold their two other premium brands to India the second largest emerging auto market. This is about currying favor and nothing else. Oh and about profitability. The internal combustion engine will disappear in the western world first and so China and India will still offer a market for the more polluting drive train. R&D is hugely expensive and the American industry is way behind the curve on this one. They still have to make the easy buck somewhere. Why not in a part of the world in which they don't live. The sale to China makes sense to them on so many levels that I can't see this turning around. The business world is not a sentimental or nostalgic lot. They understand and obey only one master. It is wealth.
03:02 February 2, 2010 by repat_xpat
Ford / Volvo was a fairly successful marriage largely because Ford learned from Jag: to let the local company stay local. GM did not do the same at SAAB and the leadership at SAAB never worked well with GM, this was part of why GM/SAAB didn't work so well.

Unfortunately Geely doesn't have the same experience as Ford and the culture is much more authoritarian than American, or even German culture -- China is the opposite of the egalitarian Swedish culture. These two items spell some tough times at Volvo in the next few years. My guess that the Volvo's only hope is to comply with Geely, and that is one thing the Swedish leadership at Volvo will not do. The eventual result will be that Geely will move work out of the hands of the Swedish management & Unions (labor & engineering) and keep only a skeleton crew in Sweden (will it take 20 years?).
21:41 February 4, 2010 by zhqwang
It is very laughable.There are many egalitarian culture in China. I want to ask where you hear these scandals. I felt very funny. I advice you go to China to look at and compare, don't print those words from the western news or media. I am chinese. I am be USA now, I will go back my fatherland. Obama say China forbid free of network.Are there some ban for network in USA. My reply is YES. Do you know that the western news and media only report bad news for China, a fat lot good news. Of course there are your egalitarian Swedish culture, we have ourself. they have difference but we should respect the differecne each other.
20:20 February 5, 2010 by morchad
The Chinese are doing something right.....the yanks are borrow trillions from them because they are broke.... can you imagine it.....the land of opportunity borrowing from communists.....can you really believe it???

Give China a break for a change maybe they are telling the truth or have we been blinded so much by our own media
13:09 February 15, 2010 by Venturisection
You do realise morchad that the purchase of Volvo is funded by US Investment money.

Also their is precident for beign skeptical of China's intentions you only have to look at what happen to the Production at MG Rover. Unless its in writing in an iron clad document that won't let them out of producing in Sweden. I dare say I'll believe it when I see it.

The chinese do not garner trust, and its mostly foreign investment that is heading to China. I do hope their economy blows up in their face so it doesn't continue.

zhqwang its called propaganda no doubt its in your news too. Lets face it people see investment and manufacturing going to china which leads them to wonder when their jobs will dissappear. Doesn't help that China artificially limits it's currency and the dirty deals its companies do dirty as hell.

I propose massive Tariffs on Chinese Imports untill they trade their currency fairly.
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