During the fourth annual Global Auto Forum (GAF) held in Wuhan, China, Li Shufu, Chairman of both Zhejiang Geely Holding Group Co., Ltd and Volvo Group spoke about the reported animosities in the Group.
In 2010, Geely signed a deal worth US$ 1.8 billion to purchase Volvo from Ford. Geely’s acquisition of Volvo was the largest foreign purchase by a Chinese car manufacturer, and is being watched closely by industry observers to determine whether such large cross-border deals will become commonplace in the future development of China’s auto industry.
During his GAF remarks, Chairman Li spent most of the time talking about Volvo. This is because ever since Geely acquired the Swedish carmaker, there has been a great deal of speculation about how the integration process has been going. By all accounts, Geely has been taking a hands-off approach with respect to Volvo, and this was confirmed by Chairman Li’s comments.
Li emphasized that Volvo and Geely are separate companies with very different products. Geely’s cars are for the masses, while Volvo is a luxury brand. Chairman Li also stressed how much attention Volvo pays to driver and passenger comfort in areas such as the car’s internal air system.
Organizationally, Chairman Li said that, while he is Chairman of both Geely and Volvo, the companies operate independently. As he put it, “Geely and Volvo are brothers, not father and son.”
That has not prevented Chairman Li from using his influence to help Volvo to penetrate the China market. While only 37,000 Volvos have been sold in China so far this year that is due to change soon. A new Volvo plant in Chengdu is more or less completed, and a second assembly plant in Daqing in the far north of China in Heilongjiang Province is due to come online in late 2014.
) - Thursday, October 24th, 2013 - filed under Industry
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