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Geely reveals Volvo China production plans

TT/AFP/The Local · 1 May 2010, 12:14

Published: 01 May 2010 12:14 GMT+02:00

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Daniel Dai, vice president of Geely Automobile revealed the firm's plans in a discussion with Swedish business website placera.nu at Geely's production plant in Ningbo, south of Shanghai.

"By assembling in China we can bring down the cost of the Volvo models," he said, indicating that further models could soon follow.

Geely had previously made known its intention to examine the option of widespread Volvo production in China.

"Our low cost position will benefit Volvo while it will continue to be a premium brand," said Daniel Dai.

Zhejiang Geely Holding signed a deal at the end of March to buy Volvo Cars from Ford. The US car maker agreed to sell its Volvo unit for $1.8 billion, less than a third of the $6.4 billion Ford paid for Volvo Cars in 1999.

Daniel Dai expects the final paperwork to be signed in four to five months.

Story continues below…

Volvo Cars already has a production facility in China, where it has linked up with local firm Chang'an Automoble to make S40 cars and a version of the S80 sedan.

Volvo has 22,000 employees worldwide, including 16,000 in Sweden.

TT/AFP/The Local (news@thelocal.se)

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Your comments about this article

14:26 May 1, 2010 by spy
"Our low cost position will benefit Volvo while it will continue to be a premium brand," said Daniel Dai.

... What the Chinese know about premium brands you could write on the back of a postage stamp which is probably why they haven't got any of their own... Poor Volvo - I hope this is not as bad as it seems.
15:19 May 1, 2010 by harrylatour
The Chinese are Quite capable of making high quality goods,,,,you do not get to launch orbital spacecraft if you don't know how to open a toolbox!! The truth is any industrialised country can and does turn out both good and bad goods.If a car is sold as a premium brand and has all the atributes of a Morris Marina,,,,they just won't sell them!!
16:47 May 1, 2010 by spy

Being able to open a toolbox and being able to steward a brand are very different things.

I can't think of 1 strong Chinese brand with global reach inside or out of the automotive sector, can you?
17:12 May 1, 2010 by 2394040
The "low cost" is the result of the repression of freedom and the use of slave labour.

A model here, a model there, and somewhere down the road, not one single Volvo will be built in Sweden.

But it will still say "VOLVO". That makes it Swedish, right?

Look out SAAB! Your ultimate fate can't be too far behind. Oh, but SAAB is still built in Sweden! They will never take SAAB out of Sweden!

If you really believe that, check up on SAAB again in, oh, say 10 years.
17:45 May 1, 2010 by Aussie

Google Huawei - www.huawei.com

All Chinese, huge brand - Global and very high quality
18:11 May 1, 2010 by ingka
you probably can't think of a strong Chinese brand, but there are plenty of non-Chinese strong brand who actually produce in China.

Say ... IKEA, Sony Ericsson, Tetra Pack for example.
18:11 May 1, 2010 by bjinger
to #4

you speak like a politican, if you are, be a good one, please figure out a solution to help the workers in Volvo.

Your comments misled people to believe that Volvo car is sill a Swedish car company, but the fact is not,
18:20 May 1, 2010 by Ghostrider
Anyone surprised?

Volvo assemby in China?

New Saab owner is insolvent and using Saab to fund itself?

Banking crisis grows?

Poor, poor, Sweden.
20:08 May 1, 2010 by marionettes.show
I am so surprised some of ppl here are full of 'hatred', if I can say so, against China.

You are optionally blind to iPhones, HP laptops or IKEA furniture etc. labeled "made in China", and also quality Chinese brands like Huawei. Call them slave labor or whatever you like, just remember that their iphones, laptops and furniture are made by these 'slaves', do hypocrites ever feel guilty of making them in China or buying these goods?

For China, being criticized or predicted to collapse for a long time, its economy still grows no matter you believe these statistics or not. Sadly, a lot of ppl here neither see this unusualness nor care what is really going on there, but being pathetically sarcastic.

This competitive world is changing, if you don't know the rules, you gonna lose the game. Probably, some ppl just enjoy being losers? Well, forgive my funny 'sarcasm'.

BTW, if you don't pay taxes to Sweden or you don't even live here, I think you have no rights to mock this country.
20:57 May 1, 2010 by spy

Part of being a strong global brand is that it should have recognition....


You are an idiot if you think that IKEA, Sony Ericsson, Tetra Pack are under Chinese stewardship.
21:24 May 1, 2010 by pjm69
The point is this:

Volvo used to be a Swedish Brand, built in Sweden

Then it became a US run company, mainly built in Sweden

Now it's a Chinese run company, and all Volvos will soon be built in China.

If you can think of a Chinese company making cars in China with a high quality, highly respected image abroad - then I'd love to know. Truth is, Geely don't really care - they can market Volvo as a car with a premium heritage to their own population of billions...why do they need sales abroad. Sweden sure won't be their target market.

I love Volvo, and Sweden, and what's happened here is principally through sheer ignorance of politicians, and businessmen who care only about their bottom line this year...because that's what gets them their fat bonuses.

Sorry folks, but Volvo as a world leading brand looks pretty much over.

And if you want evidence of the above - who's bought an MG since the Chinese bought them and transferred production to China? Did you even realise they still make them in their tens of thousands? Thought not.
21:35 May 1, 2010 by Kevin Harris
Volvo already manufactures models in China; for sale on the Chinese market. It would be suprising if it didn't, most companies do that. Nor is it is not suprising it will extend the lines to other models it plans to also sell in China in the future. The significant news will be, if Geely manufactures models in China for sale outside Asia, especially Europe and Asia. That will mean less production in Sweden and Belgium which currently mostly supplies those markets. I don't think Geely will do that on a significant scale. The Chinese may not know much about luxury brand management, but they pay for the best advice money can buy, and they tend to listen. I may be wrong, i often am.
23:27 May 1, 2010 by ingka
@ spy; I do not appreciate being called an idiot, so temper your comments please.

especially if you don't care to read my comment. I wrote that most european brands actually produce in China (and by any means Swedish ones as well). Which means that the place of production is irrelevant to the brand and it's brand loading.
00:40 May 2, 2010 by Twiceshy
The banner behind the car is ironic. It will have to be changed. "Chinese Volvo: Pedestrian Detection with full Auto Acceleration."
02:10 May 2, 2010 by volvoman9
Anyone who thought this would not be the case was naive. The question will now be if the price of this premium car does indeed fall or if it is instead the quality that disappears. Maybe both. The Chinese are quite capable of producing a quality product but as I have always maintained they are short cutting the intellectual process by buying it rather than developing it. We are watching a developing capitalist culture. Some day the populace may rise up against oppression but this revolution may not lead to success. Time will tell. I'm just glad I ordered a new Volvo recently. I may never get the chance to buy another Swedish built one again. I've owned six and soon seven Volvos and the only one I ever had trouble with was the one built in Belgium. I don't think it was a function of the country of origin but instead the fact that I bought a first production year model. You don't however hear a lot of complaints about Belgian Volvos.
02:55 May 2, 2010 by GLO
Saab, Volvo,were both financial loosers..... Technology, Testing, Markeing,thats all thats left.. Soo.. Build on your strengths..Sweden is not in the World Market with production.. better get it... Unions and work ethos are changed..

Political leadership has sold Sweden on fantacy....

Volvo will be a great auto company under a World Management concept in China.... Watch china build a Great Company,, you all better get it...Volvo will now have a way into the future..Saab ???? not good....
04:36 May 2, 2010 by DAVID T
all the swedish jobs will go - not suprised really as the workers are overpaid and lazy
09:24 May 2, 2010 by Nemesis
@ marionettes.show

100% right.

China is a superpower in the making.

The country is growing at an enormous rate.

People should visit China and they will see that the dsays of ´no dogs, no chinese' on the lawns are long over.

Every city is full of skyscapers.

Every business is booming.

Compare that with UK, USA, Ireland, Spain, Italy, etc where a lot of business is on its knees.

China is not perfet, but it has come a long way and looks like going a lot further for the forseeable future.
10:22 May 2, 2010 by Keith #5083
#spy "Part of being a strong global brand is that it should have recognition".

Recognition where? Oh, you mean public recognition,huh? well, jo public generally sees what he/she wants to see or what the 'media' feeds them to see.

"Recognition"?? Follow the money - the money pouring into China from the West to buy chinese goods - that's the real recognition. The foreign exchange that has allowed China to rise from near abject poverty to being certainly more prosperous than ever before.


Slave labour? Oh yeah, it is so different here and in America,huh? Well, now it is, but how many decades back do you need to go to find appalling work/life conditions in Europe and the USA. For that reason many left Sweden to go elsewhere. Any Swedish Volvo workers care to live in the increasingly prosperous and low tax areas of China?

The modern Volvo is innovative, looks beautiful, but is overpriced. Competing on the world stage is difficult, especially after Ford have ruined it's reliability reputation( 18 month old Volvos needing new shock absorbers???). And you are really worried that Geely can make it worse??

Take the blinkers off and recognise the realitiy.
11:30 May 2, 2010 by arslan11
If Volvo and Saab would have been gaining profit then they dont have to beg other companies for help and survival.

Now if Swedish companies or investers can't buy or support Volvo/Saab at same price then it looks awkward to comment on those who are purchasing..
14:02 May 2, 2010 by YCR
China is a troublesome country,but i am glad that someppl knows better than others.

Is there anyone who havn't use a thing produced by "slave"?

and how many salary you can give to them when the average profit of factories is lower than 5%? and most profit is come to your westen pocket. taht is why you are not "slaves".

it is very sad to see them working with so low salary. and it is also very hard for china to do things in a west dominated world.

it is good to see many factories already think about future and start to set up reserach centers.not only rely on cheap labour.

good luck!
21:36 May 2, 2010 by spy
Keith #5083

Strong brand awareness and positive perception creates desirability in consumer products and therefore allows you to sell intrinsically the same product at a higher price. I say again; name one broadly appealing, recognisable, Chinese brand...

And I don't follow your argument about 'following the money'. What an earth has deep pockets got to do with being able to steward a global brand? Whether you like it or not China is not synonymous with creating premium goods.
21:38 May 2, 2010 by bjinger
yes, the masters of the slaves in chinese factories arw from the west, just see the increasing imports and exports volums by the western invest facories in china. if the chinese workers are underpayed, then the western factories owners are to be condemned.
22:23 May 2, 2010 by Keith #5083

And I say recognisable to whom.The public,big business..who exactly?. As '#marinettes show" pointed out, brands like Huawei are not recognisable to the public but exist on a massive (and reliable) scale.Used by major Scandinavian telephone/internet companies, major undersea cable-laying requirements for governments/companies. As others point out on this blog,why would they need a 'recognisable brand' when they are busy making good quality product FOR a LOT of recognisable brands?

'Premium brands',as you call them - particularly in electronics, have long been 'sub-contracted for production' to Taiwan/China...like 25+ years! You bought an english tv, a german tv, only to find when you took the back off it had been assembled in Taiwan/China or the parts originated there.

For " is not synonymous" read "has not been synonymous", for the times they are a'changin! Creating premium quality goods - for others to sell undetr their own brand label - has been how the Chines have accumulated the money you so easily deride.Money has always been the key indicator of the success of any enterprise.

Why bother trying to make money with brand recognition when you are the ones manufacturing the goods? Brand labels are an enigma nowadays, most times you don't know where the heck it has come from! In this next decade we will see names like Geely/Volvo hitting the markets big time and,as is the situation now, we will all be buying - with or without the label.
11:14 May 3, 2010 by DogsBreakfast
There is a lot of strong comments on the issue of Chinese manufacturing of products previously produced in outher countries - especially Sweden.

I work for a major Swedish company that manufactures in Sweden and China (not cars though!) and other countries around the world.... and it is a worry that some senior managers tend to look at costs and profits. However at least at the moment there are level heads in control where I work.

Sweden and Swedish industry has evolved over the years to what we have today..... a country that has it's strengths based in technology, engineering and inovation. As long as we can keep these Sweden can retain it's reputation and competitive edge on the world .
13:03 May 3, 2010 by Horace
My Lenovo laptop, made by a chinese company in China, got a lot of quality comments here in Sweden when I take it out to use it.
21:43 May 3, 2010 by spy
Keith #5083

You are not convincing me that you know anything about the power of a strong brand... Like millions of others I will pay a little extra for Nike trainers rather than some cheap no-name chinese brand even though they could easily be made in the same place and are of similar quality. But as ever the consumer will decide so we shall see.
01:37 May 4, 2010 by Luke35711
I was afraid of this. I anticipated this. And yet, I am surprised to see how quickly things are moved. It must have all been pre-planned a year or two in advance.. Amazing.
09:39 May 4, 2010 by Keith #5083

Oh,forgive me spy,I didn't realise I needed to do a 'sales job' on you. I wasn't out to convince you of anything,simply hoping to allow your thoughts to wander from a narrow brand-indoctrinated view. Your trainers ARE produced in sweatshop chinese factories that do not meet reasonable standards for employment safety - (http://www.globalexchange.org/campaigns/sweatshops/nike/stillwaiting.html). That you are willing to pay extra to American shareholders for the priviledge of wearing the same shoe is,of course, a premium brand decision you are perfectly free to make.
15:01 May 4, 2010 by spy
Keith #5083

So if you are not writing these posts to sell your point of view what are you writing them for? Therapy perhaps?

And yes I already made the point that Nike trainers could be made in China. But I find it amusing that after defending China you then go on to run down their industry - it's almost as if you don't know what you are talking about.
14:48 May 5, 2010 by rumcajs
I don't realy care if the Chinese are gonna make Volvos in China as long they'll be sold in China and the rest of Asia only and leave the European sales made in SE.

Google "VW GOL" (yes, without the "f"), a cheap VW made in Brasil and sold only in South America; I had one and the quality is much lower that the ones made in Europe. There are Mazda, Renault, and Toyota factories in Colombia and other South American countries making cars with the same quality of the French and Japanese brothers, but with the tecnology of 10+ years ago (no airbags, no power steering, no AC, no el. windows, etc) and they are sold in South America. It's not that they MOVED the production from France and Japan to South America.

Anyway, the fact the the very owner of the company is now Chinese makes one very worried about this things.
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