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CHINA

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.

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.

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CHINA

Sweden’s Volvo Cars may merge with Chinese owner Geely

Sweden's Volvo Cars and its Chinese owner Geely announced on Monday that they are considering merging into a single group in order to share resources, but would preserve their separate brands.

Sweden's Volvo Cars may merge with Chinese owner Geely
File photo of a Volvo test-drive. Photo: Christine Olsson / TT

The merged firm “would have the scale, knowledge and resources to be a leader in the ongoing transformation of the automotive industry,” they said in a statement.

“The combination would preserve the distinct identity of each of the brands Volvo, Geely, Lynk & Co and Polestar,” they added.

Geely bought Volvo in 2010 from Ford which hadn't been able to turn around the Swedish automaker. But under the Chinese firm Volvo has rebounded and smashed its sales records.

Volvo sold more than 705,000 vehicles in 2019, besting the record it set in 2018 by 10 percent, and the automaker expects continued growth this year.

The statement said the firms would create a joint working group to prepare a proposal for the boards of both firms.

“A combined company would have access to the global capital market through Hong Kong and with the intention to subsequently list in Stockholm as well,” it added.

Volvo put off a share listing in 2018 due to tensions in global markets.

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