Geely seeks to allay Volvo tech theft fears

As China’s Geely Group prepares to purchase Volvo Cars, suppliers and unions have expressed concerns about unauthorized copying of the Swedish carmaker’s technology.

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At the same time, a Swedish government official downplayed forward progress on the deal.

Intellectual property protection worries may result in come suppliers withholding their latest innovations from Volvo under Chinese ownership.

But in a meeting with Swedish journalists the head of Geely’s research and development centre, Frank Zhao, did his best to shatter assumptions about the propensity of intellectual property theft among Chinese manufacturers.

“Look what we can do ourselves. We don’t copy,” he told the TT news agency.

Geely was accused of design theft last year when showrooms in Shanghai displayed its luxury concept car, prompting many observers to criticize the vehicle as a knock-off of the Rolls Royce Phantom.

“It’s not a copy. We made a car with an elegant appearance. But we listened to our critics. That car will never come out on the market,” said Zhao, who has studied and worked in Japan, the UK, and the United States, where he served as Chrysler’s head of technical development for seven years.

But Zhao wanted to come back to China in 2004 and first took a job with Brilliance China, a state-owned maker of cars, auto components and minibuses.

Zhao was eventually drawn to Geely and owner Li Shufu’s lofty goals.

“A private company has greater possibilities to do more,” he said.

He’s aware of the rest of the world’s accusations against Chinese automakers and doesn’t want Geely to be lumped in with its peers.

“I hate copying. We can do things ourselves,” he said, holding up Geely’s research centre in Linhai, about 200 kilometres south of Shanghai, as an example.

He explained that the facility has everything it needs to develop cars from the ground up.

Meanwhile, enterprise ministry state secretary Jöran Hägglund cautioned that negotiations between US-based Volvo owner Ford and the Geely Group haven’t progressed as far as the impression given by both parties.

“If you boil down what they say, Geely is the so-called preferred bidder, but not much more. There are still several outstanding issues,” Hägglund said in a press conference in Hangzhou, southwest of Shanghai.

During his quick trip to China, Hägglund has meet with Geely Group owner Li Shufu to discuss the Volvo deal.

On Thursday he is scheduled to meet with the National Development Reform Commission (NRDC), a Chinese government body tasked with setting the country’s macroeconomic policies and guiding the restructuring of the Chinese economy.

As a part of its mandate, the agency is also in charge of drawing up plans for the Chinese auto industry and making decisions about Chinese companies’ acquisitions abroad.