Recently Zhejiang Geely Holding Group closed the deal to purchase Ford Motor’s Volvo brand. The move however is considered as a threat to the current Audi A6’s status as the Chinese state’s official car.
Li Shufu, the head of Geely, looks forward to successfully acquiring Volvo for up to $2 billion.
47 years old Li has been known to follow the footsteps of Henry Ford due of his ambition to become a mass manufacturer of affordable cars. His recent plans include a factory in Beijing with the potential of producing the same number of Volvos in China as in foreign countries.
An analyst working with IHS Global Insight, an industry consultancy, John Zeng, said that Li Shufu bet huge and the stakes are “extremely high.” Nevertheless, Zeng believes that he could succeed since he can rely on the Chinese market to turn Volvo around.
China has already replaced the United States as the top auto market last year. In fact, China is now the primary source of business for carmakers around the globe in addition to domestic newbies, which are looking for global acquisitions to climb the success ladder.
However, Chinese carmakers are reported to be on the verge of entering difficult times, more than the Japanese and Korean companies, in spite of an expanding home market and a supportive government.