• Sweden edition
 
Volvo and Geely clash on China expansion

Volvo and Geely clash on China expansion

Published: 03 Dec 2010 10:50 GMT+01:00
Updated: 03 Dec 2010 10:50 GMT+01:00

Geely, which acquired the Swedish car maker from US giant Ford in August, said in September it planned to increase Volvo sales to 300,000 cars a year in China alone.

Company chairman Li Shufu said he wanted three new Volvo plants in China to produce that volume. However, Volvo's management wants to hold off on expansion for now, the Financial Times said Friday.

Members of Volvo's Gothenburg-based management "will not decide about investing if they don't have a business case with black figures and good margin," a person familiar with the discussions the British newspaper.

The person described the discussions as "heated, not acrimonious."

Volvo spokesman Per-Åke Fröberg told AFP on Friday that Volvo and Geely were in talks over expansion in China and that management would take a decision on "the first step of localised production in China...within a couple of months."

"It's a natural thing that there are discussions about such an important matter as the Volvo car strategy for China," he said.

When Geely and Ford closed Volvo's purchase in August, Li said Volvo would "remain true to its core values of safety, quality, environmental care and modern Scandinavian design."

He added the brand would strengthen the existing European and North American markets and expand its presence in China and other emerging markets.

Li "has a very strong belief in the future of Volvo in China and has a vision of up to three factories over a long period," Fröberg said.

"That doesn't mean that he thinks decisions should not be based upon a firm and sustainable business plan," he said.

Volvo already builds its S40 and S80 models in China, through a partnership between former owner Ford and Chinese rival Chang'an. The brand is set to sell around 30,000 Volvos in China this year, half of which are imported.

Chinese state media said in October that China, the world's largest auto market, thad become the third-largest market for Volvo.

AFP/The Local (news@thelocal.se)

Your comments about this article

13:00 December 3, 2010 by Thebinary1
How is this actually news since such a conflict was inevitable even when Geely was being considered as a suitor!

A marriage between a dictator and a free/liberal thinker is impossible to work.
15:46 December 3, 2010 by Rolf100
Just to understand; Ford bought Volvo and then sold it to Geely rather than shut it down. So Geely owns Volvo and Volvo believes it has rights?
20:35 December 3, 2010 by saar
@Rolf100

Yes, Volvo has rights, because Chinese can't make cars. Volvo can.Without Swedes there will be no Volvo but chinese crap called Volvo.
20:39 December 3, 2010 by volvoman9
That didn't take long. How will we pronounce Volvo in the future... Wolwo,... Bolbo?
22:59 December 3, 2010 by voidplay
The Chinese are thinking we brought them we made some commitments, we try to keep our 'commitment' but we make cars for the Chinese in China, and probably find an excuse to shut down the Swedish factory if it hits our bottom line.

The Swedish Volvo execs are thinking, oh they make all those cars in China and soon they would be competing with the Swedish factory and we would have to shut down. Why not come up with some arbitrarily low market projections for China and then export them at exorbitant rates. The Chinese workers will work overtime making Volvo scale models, so that they can pay for Swedish social system, long holidays, and sick payment and parental leave and ........
08:42 December 4, 2010 by PonceDeLeon
Silly, Geely. They actually expected the people at Volvo to "Go To Work!" As we say in the olde country "Buena Suerte Sr. Li.."
08:44 December 4, 2010 by Keith #5083
@Rolf

I totally agree with you.But then Li Shufu is a rather special man - even in China.

@Saar

With Swedes there was no Volvo - you didn't want to support it's future. Ford did. Geely did - but Swedes did not.As for "Chinese crap", I bet there is a lot more of it in your house than you know about. Your PC for example that you write your comments on to post here or your modem-router, and a few more things like that. True patriotism begins in the wallet, not in the mouth.

And Yes, Volvo's are very very special cars.Why is it foreigners understand this but so many Swedes don't?
11:52 December 4, 2010 by saar
@Keith #5083

"You", "yourself", "your house" - do you know me? No. So,speak for yourself.
16:21 December 4, 2010 by Keith #5083
@saar

Oh, I thought since you were so good at generalising in your comments you could not possibly object to someone else doing the same.

Just out of interest, what, following your argument, is the difference between 'chinese crap' and 'American crap' ? Or do you consider Ford to be a European/Scandinavian company?
09:24 December 5, 2010 by saar
Just for you to know, I do not have/use any Chinese products DEVELOPED or copied by Chinese. What I have/use are "Made in China" products developed by western/Japanese/Korean companies. See the difference? I don't care who bankroll what, as long as it is safe/reliable/stylish/whatever. When Chinese start making such products themselves, I'll buy them too. So far Chinese own products are mostly crap.

If Volvo becomes 100% Chinese(R&D, Design and Production,etc.), I'm not going to buy it.
12:56 December 5, 2010 by Keith #5083
Yep. The difference is very clear. If it's a western company specifying what they want and sticking their label on it, then it's ok that it's made in China.

If it's a chinese company selling OEM to western companies, with Western labels on it, then it's ok.

If it's a chinese company selling directly under it's own label...then it's not OK.

I guess that kind of blows Huawei products off your list, but not off major telecom companies lists.

So, with this logic, Volvo was Volvo even when it was Ford, but not now that it is Geely.

Yep. It's very clear to me.
15:31 December 5, 2010 by Horace
Saar,

I think one of Keith's points that might not be clear to you is that regardless of where a product is said to be developed, there are a lot of components in there that came from suppliers outside of the company, and a lot of them are Chinese.

So when Volvo was Ford, even though the design HQ is in Gothenburg, chances are there were many components designed and made in other countries such as USA or China.
19:22 December 5, 2010 by saar
Hoarce,

have you read my post?

Keith, there are a lot of products coming from China that are not crap. I'm talking about consumer products, not steel pipes, telecom parts and fertilizers. So,yes, Huawei products are off my list. If I ever need them and they are good I'll buy them.

There is a company called Haier, their appliances are cheap and good.Pure Chinese. I used them when I was living in US. Chinese cars? No thanks, I don't want to die young.
21:33 December 5, 2010 by Keith #5083
#Saar

Ok. I take your point.

I don't think the issue of safety with Chinese cars applies as they will have to meet European safety standards anyway to be able to be sold in Europe.Certainly they will have to meet Swedish standards to be sold in Sweden.

My essential point about Geely and Volvo is this - Li Shufu really is a very special man.His private company is not state owned and it is generally accepted that the State has Li Shufu in a rather special category. He's an amazing businessman by any western standard, unbelievable by Chinese standards.

I do not believe that this ownership scenario will be detrimental to Volvo.Certainly not as detrimental as I believe the previous owners were. Shock absorbers failing on 18 month old Volvos? There had to be something wrong with that cost-cutting production exercise.
21:57 December 5, 2010 by AcoomodationStockholm
Hi everybody..think of this scenario: Volvo cars will be produced in China, then it will be productive, then the Chinese will later announce it can no longer maintain Volvo Sweden because of the high cost of production. So they will shut down the Swedish plant and retain the ones in China...got it?

Then the Swedes or others who are used to the Volvo culture will have to import Volvo cars from China.... do you see that?

Sweden ...wake up!!
22:15 December 5, 2010 by wenddiver
I think the designed in your country but we said to hell with your workers we are going to build it in a Dictatorship are worse than products designed and built in the ditatorship. This will be the first year that I won' be adding a Lennox Chna ornament to my tree. They come in beautiful Red boxes that say "American Orignals" , but when you flip them over they say "Made in China".

The Fiesta company makes a lot of noise about being an American Product and their dishes are made in America, but on the same display they have boxes of Spoons and Forks that are Fiesta ware, but made in China.

I would tather buy a Swedish Product made in Sweden, an American Product made in America and a Chinese product truthfully labeled. If anybody has a list of Swedish products that have not abandoned their workers and fled to China, please post it.
19:07 December 6, 2010 by mkvgtired
Just be careful about intellectual property in China. I have a feeling that many Western companies will learn a very expensive lesson that could potentially bankrupt them.

http://online.wsj.com/article/SB10001424052748704679204575646472655698844.html
22:11 December 6, 2010 by Emmaboda
Production of Volvo cars in Sweden, will end within 5 years, mark my words. You had no interest in Volvo cars for years. Ford poured a lot of dough into it, and that still wasn't good enough. Getting something is always easy, hang onto it, is a different story. Make sure you don't let Volvo Trucks and Buses go as well!!!!!!!!!!! After all I like Saab's much better in any case.
16:29 December 12, 2010 by grr
Hmmmm....I'm on my 4th Volvo, wondering what I'll purchase next. Guess I'm hoping an all electric will appear before I have to make that decision.
Today's headlines
National
Fears schoolboy murdered in Sweden
Photo: TT

Fears schoolboy murdered in Sweden

Police in Halmstad say the results of forensic tests suggest a 16-year-old boy found dead in a creek was murdered. READ  

National
Elk hunters risk injury in Sweden’s woods
Hunter Ingela Olsson loads her rifle at sunrise in Norrbölla, northern Sweden. File photo: Gunnar Lundmark/SvD/Scanpix

Elk hunters risk injury in Sweden’s woods

Sweden’s vast annual elk hunt spells danger not just for the majestic animals but also for hunters, with crumbling towers and over-tiredness just two of the season’s perils. READ  

Malmö
Rat invasion closes Malmö preschool
Rats like this one have been found in a kindergarten. Photo: TT

Rat invasion closes Malmö preschool

Children in central Malmö are staying at home on Tuesday after a rat infestation was discovered at their kindergarten. READ  

National
Sweden's benefit agency site restored
Photo: TT

Sweden's benefit agency site restored

UPDATED: Sweden's Social Insurance Agency website is working again after being out of action since Monday. READ  

National
Swedish teenagers abused on Secret app
File photo: Fredrik Sandberg/Scanpix

Swedish teenagers abused on Secret app

Swedish police are struggling to know what to do with a new batch of criminal reports filed by teenagers upset about a controversial app that allows users to post comments and pictures anonymously. READ  

National
Swedish man beats bus in video challenge

Swedish man beats bus in video challenge

UPDATED: A Swedish runner who filmed himself beating his bus in Sundbyberg in north west Stockholm over the weekend is now planning to a similar challenge on the capital's Metro system. READ  

Regional
Rain causes power cuts across east Sweden
Strong winds are battering Stockholm and the east coast of Sweden. Photo: TT

Rain causes power cuts across east Sweden

Heavy rain and wind have left thousands without electricity in eastern Sweden, with ferries also disrupted by the storm. READ  

Elections 2014
Budget headache for new coalition partners
Social Democrat economic spokesperson Magdalena Andersson with Per Bo from the Green Party. Photo: TT

Budget headache for new coalition partners

UPDATED: The Social Democrats have been holding talks with the Green party to try and agree on a future coalition budget. But questions remain over how they will work together on issues including defence and nuclear power. READ  

National
US runaway banned from name change in Sweden
'Wanted' photograph of David Hemler used by US Air Force Office of Special Investigations. Hemler lives and works in Uppsala. Photo: Shutterstock

US runaway banned from name change in Sweden

A US airman who deserted from the military three decades ago and moved to Sweden has failed in his bid to get his old name back, because a Swedish court says he can’t prove his identity. READ  

My Swedish Career
Plucked out of Canada for love and guitars
Sharleen in action. Photo: Sebastian Bularca

Plucked out of Canada for love and guitars

For this week's My Swedish Career we meet a Canadian who came to Sweden for love and now works in Lidköping, custom-making guitars. READ  

RECEIVE OUR NEWSLETTER AND ALERTS
Gallery
Property of the week - Torslanda
Finest
Gallery
People-watching: September 20th
The 'black gold' of Sweden's west coast.
National
West Sweden prepares for the 2014 lobster premiere
Society
What's on in Sweden
Politics
How Sweden Democrats went mainstream
Blog updates

22 September

Welcome National Geographic! (Stockholm in my American Heart) »

"What comes to mind when you think of the “The Arctic”? Crystal-encased cliffs jutting from the sea, baronial Polar bears scavenging over sheets of cracked ice or a lone explorer heading north into the night. The image my mind invokes is of three sparkling green lines splashed across the sky like graffiti— the Aurora Borealis— our..." READ »

 

19 September

Editor’s blog (The Local Sweden) »

"Happy Friday readers! It sure has been a exciting week in Sweden, where we’re set to get a new Prime Minister after Fredrik Reinfeldt stepped down following Sunday’s elections. The Local blogged live from the key political gatherings across Stockholm. Why not re-visit the action by taking a look at our photos, tweets, videos and analysis? Since the..." READ »

 
 
 
Politics
Scandinavia and Scotland: closer links?
Gallery
Property of the week - Eskilstuna
Sponsored Article
How to start a business in Stockholm
Society
How I became a surf blogger when I moved to Sweden
Gallery
People-watching: September 13th
Society
Why is Stockholm's Södermalm so cool?
Gallery
People-watching: September 11th
Gallery
People-watching: September 13th
Politics
Five possible election outcomes
Politics
Sweden elections: How do they work?
Politics
Sweden elections: Who's who?
Gallery
Property of the week - Hornstull, Stockholm
Analysis
Five differences between the UK and Sweden
Welshman Jonny Luck is now a chef in Sweden
Society
How I opened my own restaurant in Sweden's Malmö
Sponsored Article
Stockholm tech fest: relive the magic
Gallery
People-watching September 8th
Photo: TT
Politics
Feminists fight for first seats
Politics
Immigration cut push from Sweden Democrats
Sheryl Sandberg says women have "low expectations"
Tech
Facebook exec talks women's limits in Swedish business
Politics
Left Party calls for justice and equality
Sponsored Article
Introducing… Insurance in Stockholm
Sponsored Article
Graduates: Insure your income in Sweden with AEA
Latest news from The Local in Austria

More news from Austria at thelocal.at

Latest news from The Local in Switzerland

More news from Switzerland at thelocal.ch

Latest news from The Local in Germany

More news from Germany at thelocal.de

Latest news from The Local in Denmark

More news from Denmark at thelocal.dk

Latest news from The Local in Spain

More news from Spain at thelocal.es

Latest news from The Local in France

More news from France at thelocal.fr

Latest news from The Local in Italy

More news from Italy at thelocal.it

Latest news from The Local in Norway

More news from Norway at thelocal.no

841
jobs available
Swedish Down Town Consulting & Productions
Swedish Down Town Consulting & Productions is an innovative business company which provides valuable assistance with the Swedish Authorities, Swedish language practice and general communications. Call 073-100 47 81 or visit:
www.swedishdowntown.com
PSD Media
PSD Media is marketing company that offers innovative solutions for online retailers. We provide modern solutions that help increase traffic and raise conversion. Visit our site at:
http://psdmedia.se
If you want to drink, that’s your business.
If you want to stop, we can help.

Learn more about English-language Alcoholics Anonymous in Sweden. No dues. No fees. Confidentiality assured.
AA-EUROPE.ORG/SWEDEN