After news that the EU have okay-ed the sale of Volvo to automakers Geely, comes word that the Chinese company will be setting up a research and development centre for Volvo at the Shanghai International Automobile City. Looks like the ‘technology transfer’ plans have started immediately! Rumours of Geely scouting for a possible site in China for a Volvo assembly plant still persists, and such a plant will likely be near the R&D centre.
The R&D centre will be called Geely-Volvo Research and Development Center and will be situated in an industrial park in the Jiading district of western Shanghai, which plays host to other big names like Shanghai Volkswagen Automotive Co., Shanghai Automotive Industry Corp. and also automotive suppliers such as Fiat Powertrain Technologies. The Shanghai International Circuit is also located in Jiading.
Geely’s president Li Shufu said that Volvo’s biggest handicap is its economies of scale and will only start making a profit if sales hit 370,000 units a year. This number currently stands at 335,000 vehicles globally, of which 22,664 are Chinese market contributed numbers.
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Hmmm… if the two combine the name, will it be named as: GeeVo haha!!! sound funny man. Anyway I also wish Volvo will bounce back as the glory days such as 850T, it was such a wonderful Turbo boxy car.
The Chinese seems serious about the Volvo brand and technology and the MARKET. Volvo weakness is the cost, and hence the China company would try to reduce the cost, and hence stand a chance to challenge the WORLD market.
A country has big consumer as China also not using the power to cut off all outside vehicle coming in, but encourage local manufacturer to challenge the outside world.
It shows bolehland is lousier than a communist country’s policy in terms of automotive, our minister also go embrace them like holding their leg. I am not surprise any local GLC like Sime or Hicom, or etc dealers already lining up to sign Geely to bring in Malaysia.
This is the difference of the policies that benefit the NATION as compare to under the name of the NATION, but benefit own group of people. Everyone still sleeping?
hope some other company can take over VOLVO….than this Geli…..just don “trust” it….
A Chinese company took over IBM Computers but people still ‘trust’ this brand and products more than the other ‘American’ brands. So how?
Lenovo !! Think -pad series still the No.1
most trusted business computer and best seller !!!
Com’on….Its just like Proton and Lotus…
Lotus does not use Campro engine right?
Thus neither Volvo will be using Geely’s engine…
In other words, Geely needs Volvo help and support so that some transfer of technology can be done to enhanced the car.
Cheers….
Geely promised business-as-usual for Volvo plant in Sweden like what Tata did to Jaguar is to Britain. If the relationship between Volvo & Geely worked well both would be profitable:-
i) Volvo for “increased market share & profitability (bottom-line), brand-awareness / promotion in China and abroad
ii) Geely for quicker absorb of key area in motoring technology and thus enhancing both the quality of Geely and perhaps also, the market share and profitability.
Geely should focus of the mass (Incidentally, China is currently the largest car market in the world, and the Chinese masses are very much car-literate and discerning) whereas Geely should leave Volvo to focus on the higher premium cars.
In due time, Geely may break her mould from being a mere a Chinese car to a world-class car like in the 1960’s – 1970’s Japanese car and in the 1990’s the Korean car.
Good luck, Geely
Joe,
The reason why Tata – JLR relationship worked well is the entrepreneurial nature of Tata. Tata is just one company, its a holding company which has 100 plus companies. The group companies like Tata Technologies also play a role in this relationship.
If the parts and components are made in China, they could bring down the price of the car and hence make it more competitive. In the same way they could have the critical mass. Just be careful if they start to ‘localize’ the parts in China the Volvo quality and specifications are not ‘localized’ too. Otherwise Volvo would lose the trust of customers and see it as just another China spin off model and shun it.
Volvo has a reputation of expensive parts and services. I think Geely can make Volvo ownership more affordable. As a volume producer, Geely can leverage Volvo technology to make the investment worthwhile.