Geely enters new strategy with Volvo’s export hub in China image

The Zhejiang Geely Holding Group Co, the Chinese parent of Swedish automaker Volvo plans to use its home base as an important export hub for the latter.

While the official that disclosed the plans for Volvo to use China as a manufacturing base to ship locally produced cars to Russia and the United States did hide his identity, the report has more than one chance to pan out.

Although not a customary decision when it comes to a premium brand – or for that matter, not for a mainstream one as well – the idea of exporting cars from China has deep roots in the way the global economy runs today. Just think about any number of items in your household, then look at the label to see where they’ve been produced. Yes, chances are at least 90% were “Made in China”.

Then, Geely has been under intense scrutiny from other Chinese producers – and actually other Asian owners of foreign brands – seeking a resolution to the difficult problem, the Chinese companies don’t have experience with managing a global foreign brand.

Volvo has been a positive recent example though – even as many rumors quoted dissension at the top management levels of both companies – as China’s “affordable” luxury auto segment has soared, while Volvo has been also successful globally – especially in the US and Europe.

Via Reuters