Geely Walks From Volvo, Saab Deals
The Chinese “home grown” automaker Geely had been widely rumored to be highly interested in snapping up Volvo or Saab. Or both. They either have lost interest. Or they employ the stratagem usual in a Chinese market: Shout “Tai gui le!” (too expensive), make an indignant face, and walk away. If they run after you, the next round of haggling ensues.
Geely “has not submitted, and has no plans to submit, any bids concerning the takeovers of ‘Volvo’ or ‘Saab’ as stated in recent press articles,” said Geely in a notice to the Hong Kong stock exchange, and their stock price promptly jumped 13.6 percent, Gasgoo writes. It doesn’t mean they were not or are not interested. They just didn’t hand in a—formal—bid. They sure had been talking.
After having made three “inspection trips,” to Sweden’s Volvo, Geely’s top management decided that the brand is not worth what they are asking for.
Now suddenly, Geely says the visits were part of an innocent annual overseas “tour of study” that can help it learn more of the market. And that Geely will not spend a huge sum of money to buy either Volvo or Saab, unless they go bankrupt and sell cheap.
So far, Geely’s chairman, Li Shufu, grumbled that neither Volvo nor Saab are cheap deals. He shouldn’t worry. They’ll get cheaper.
Interesting tidbit: Geely revealed that their top management had a discussion about (not) acquiring Volvo. But they supposedly have not discussed Saab yet. After all, Saab already has gone bankrupt. And possibly has come running after Geely.
Bertel Schmitt comes back to journalism after taking a 35 year break in advertising and marketing. He ran and owned advertising agencies in Duesseldorf, Germany, and New York City. Volkswagen A.G. was Bertel's most important corporate account. Schmitt's advertising and marketing career touched many corners of the industry with a special focus on automotive products and services. Since 2004, he lives in Japan and China with his wife <a href="http://www.tomokoandbertel.com"> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href="http://www.offshoresuperseries.com"> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.
More by Bertel Schmitt
Comments
Join the conversation
I think you may have indeed hit it Bertel.... Cheap legitimatcy AND a dealer network. I'm sure it's tempting them, when you look at it that way.
Looks like they need the styling help, and probably the safety help too. What an ugly grill on that beast.
there are major hurdles in marketing any kinda of chinese car no matter how good it is if they make a bloody full size sedan that does 50mpg and does 0-60 in 5 secs and sounds like a Ferrari you will still get the detractors right now India makes some fairly reasonable SUV products that are well priced and good vehicles yet there is marked resistance in overcoming market perception India is not perceived to be a an credible manufacturing and engineering centre. No amount of advertising will reverse this. China faces the same issue. I would suspect that there would even be significant resistance of Western markets to take to Chinese made Buicks or BMWs or Mercedes Benzs... we accept grudgingly that our laptops and high end prestige consumer items like LCD TVs, hifi components come from China... eg. "oh my Sony Bravia 42' is made in China. They all are these days. Bummer. But it's still ok." But I doubt this will wash on cars since they are more a reflection of ourselves that mere consumer electronics. It took a few decades for Japan to be accepted as a credible manufacturer? China has a weaker foundation to build on due to the lead paint and dead babies and all that. Give it another 10 years or so. I think we will accept Chinese made Buicks that are really Geelys or BWMs or Brilliances then if they are serious about change global perceptions of Chinese business practices.