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Geely seeks to allay Volvo tech theft fears

TT/David Landes · 20 Jan 2010, 17:40

Published: 20 Jan 2010 17:40 GMT+01:00

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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.

Story continues below…

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.

TT/David Landes (news@thelocal.se)

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Your comments about this article

22:56 January 20, 2010 by Marvino
Mr Hagglund, here are two questions you may want to ask Mr Frank Zhao :

1. Based on NRDC criteria, what is the difference between a fully State owned company and a "so called" privately owned company which includes State money in China ? (Remember, the State has offered financial backing to Geely)

2. How can a privately owned company in China (as described above) defend the intelectual property of foreign investors if the State decides the foreign company cannot legally owe intelectual property in China ?

I would be very interested to hear comments on the subject, and hope Mr. Hagglund has a moment to read them...
00:14 January 21, 2010 by repat_xpat
Duh, why do you think they wanted to buy Volvo? Do you think the Chinese are interested in the great work ethic of the Swedish unions? They want to get technology on the cheep, just like Spyker and SAAB.
03:18 January 21, 2010 by volvoman9
And so we were expecting them to admit to the desire to purchase Volvo simply to gain the technology? Lies bloody lies.
08:42 January 21, 2010 by rahpor

At least Spyker is quite open in their needs. They want to combine technology from Saab in their Spyker cars and their scale to upgrade their dealernet and to lower production costs. So, they need Saab and then Saab need them to 'stay alive'. And they're using the business-plan Saab itself wrote to keep Saab open. So, imho this is a total different situation.
23:57 January 21, 2010 by zhqwang
Now I dislike Swedish man. Why don't you oppose USA when Ford bought Volvo. But what's happen? Ford will sell Volvo. GM will close down SAAB.We steal your technology, Do you have rockets, statellite,beidou(CHINA GPS) etc,say nothing of long missle,anti-missle, medicine. ...

My country lost in the world in about 200 years ago due to closed-cloorism. So we must improve opening and reforment. I knew that Sweden are very strong country in the past. You often battle with Russia. But do you know that China are very strong country in the history. We have 5000 years civilization.But Now... My people are work hard, and clever. Do you know We start standardization work 3000 years ago. They could produce arrows,ax etc.. with use of standardization work. Do you know We can't up to scratch of the products made in 2200 years ago in the early 20th century. We can produce the high-quality prodcuts if We get rid of the stale and take in the fresh. Volvo could flourish in Sweden and China because We also hate the state-owned company. they can't take on burden flourish dream for car. Geely will burden our wish. But Sweden volvo car is unfitable for chinese character.So volvo car made in sweden will be selt in EU and usa. volvo variation fitable us will be selt in china and the rest of countries.
17:30 January 22, 2010 by Thebinary1

There is something very fundamental that you do not understand. The whole world appreciate's China's legacy and past contributions. It is the modern Communist China Government (not the Chinese people) that everybody here is against. This is why the people do not like Geely - because Geely is an enterprise for the Communist China Government and not an enterprise of intelligent and hardworking Chinese people.

With the USA, Ford and GM are not owned by the American Government. This is why there was not a big fuss.
20:37 January 22, 2010 by Marvino
Thanks Thebinary1

It is really amazing how many inteligent Chinese people living in Sweden or Europe, do not seem to understand the basic concepts of free societies.How much better China would be with a freely elected government does not cross their minds...
22:32 January 22, 2010 by _I_
All in all the acquisition of Volvo by Geely is a win-win situation to both Sweden and China. You guys know how many taxi cars in Beijing. Over 100,000. Most of them are Volkswagen and Hyundai. SAAB and Volvo have been such miserable brothers, since Germany and Korea started making huge amount of money out of the business. Probably you guys should also know another figure. There are over 4 million automobiles in Beijing, one city. That's fcking 4,000,000. Do you guys see the zeros.

IPs are just a piece of paper if you don't convert them into $. Swedes should feel proud that you can make money out your IPs and you should keep in mind you have got to keep developing new IPs and being innovative. Otherwise, you will lose your power in the world sooner or later.
01:45 January 23, 2010 by volvoman9

No one was happy with the purchase of Saab and Volvo by the Yanks either. When a company moves ownership to another of a different nationality it is bound to lose it's identity. This has happened to Volvo and Saab under American ownership but Chinese products are not viewed as having the quality of those in the western world. This is not xenophobia so much as reality. Why doesn't China build a brand of it's own to market in the western world if it can? Because it can't..... yet. Buying the brand and technology is a shortcut to credibility.
04:19 January 23, 2010 by zhqwang

Why doesn't China build a brand? I felt very disappointed for the state-owned companies. Our people all condemn those companies, but exclude Geely, chevy,BYD, they are really private company! You may say why gov support Geely. I can tell you that Gov have no choice to support like the private companies, beacuse the people dislike the state-owned companies.The state-owned companis is not very competitive.

Do you know Japan's product quality about 1960? They are very poor,but now?

I think you shoul think many questions by using improvement.

Communist is not good for the westen countries,but I think that it may be fitable china.I think that it is right untill now. may change my opion in furture 50years.
00:28 January 24, 2010 by volvoman9

I completely agree with the Japanese example and have stated this numerous times concerning these car company's travails. My comments are not meant to be a criticism of Chinese ability or intellect ; simply an observation about their ability in manufacturing. The auto industry in China is very new and therefore incapable of competing with those of the western world at the moment. Geely until very recently manufactured refrigerators. Very little in common with modern cars. This is not to say that they will not improve over time to produce a fine product but this is not possible given the time frame necessary and given the ambitions and resources of their owners. The simple route to success is to buy it from those who have credibility. No crime here ; has been done more times than one can count.
05:19 January 24, 2010 by zhqwang

I tell you one truth: China prodcued in about 1950. But I had told you reason which china don't produce high quality car. So we hate the state-owned companies,but not all. It is clear that there are a high improvement for private companies in the past 30 years.There had had some private companies in the world 500, fox example Huawei,lengend etc.Do you know it is only thirty years.So chinese man is very resposible and clever and I think that Geely can well manage Volvo if Geely bought Volvo.

Do you think that Geely can well manage Volvo ? Pleas think there are many products which don't produce in many countries,fox example plane,missle,rocket,high-train,anti-missle,high-perfomance compute....

For computer, why don't the Europ CPU,OS,etc. The Europ are end if USA don't sell cup to EUROP.
19:23 January 28, 2010 by Brucelee@stockholm.sweden
And, I should not point it out again, but seems you all forgot it.

That is:

Geely with its huge Chinese money is actually SAVING you! Saving many Swedish jobs and many Swedish family and their livings, maybe include yours. You don't realize that?!!

Don't complain, you know why you keep losing one and another? because you are lazy and we always work, by our hands.

How many Swedish are leaving post earlier everyday? How many Swedish service telephone are always answered by machine? How many Sweds mobil are always 'leave a message'? You are lazy, you are hiding yourself from work

and challenge, accept the fact and results.
22:02 January 28, 2010 by Horace
@Marvino's "It is really amazing how many inteligent Chinese people living in Sweden or Europe, do not seem to understand the basic concepts of free societies.How much better China would be with a freely elected government does not cross their minds..."

If a lot of people share a similar view on an issue but a different view than yours, most of the time it has credibility that you are not aware of.
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