Geely Discloses Plans For International Acquisitions

Bertel Schmitt
by Bertel Schmitt

Up to now, Chinese companies taking over Western brands was a Beijing opera of well-placed rumors, followed by ambiguous statements or outright denials. The Chinese government did their part in the play encouraging their automakers to acquire foreign assets, then warning them that it might not be a good idea, and then saying that they would back them if they do. Welcome to China. Now, for the first time, a Chinese company went on record that they are willing to make international acquisitions. They’ve even said why.


Geely, which is on the roster of suitors for Ford’s Volvo brand, said Friday that it is interested in using international acquisitions, the Wall Street Journal [sub] reports. They also said why: “To gain access to technologies and sales networks, and to circumvent trade barriers it might otherwise face as a Chinese auto maker. In its “path to internationalization,” Hangzhou-based Geely didn’t name any specific international acquisition targets. But all bets are on Volvo.

“In order to seek capital, to seek markets and to seek partners for international cooperation, overseas mergers and acquisitions is an important method for Geely Auto,” the statement said. Overseas deals “will help Chinese car companies with their own brands ease the competition in the domestic market, and at the same time create bigger space for growth,” it said.

Geely thinks China’s lower labor costs are also a good reason for it to get involved in overseas mergers or acquisitions. It didn’t elaborate on that point. But an individual familiar with Geely’s interest in Volvo has said Geely might be interested in shifting some of Volvo’s manufacturing capacity to China to reduce costs.

The plans disclosed by Geely jibe with TTAC’s previous analysis: Chinese manufacturers are not interested in buying foreign factories. They want established foreign brands, preferably with already certified designs, which they can manufacture in China. China’s sore point is exports. An established brand with homologated (both in the US and the ECE-zone) cars would bs a shot in the arm for Chinese exports. A foreign brand also sells better in China than a home-grown.

Bertel Schmitt
Bertel Schmitt

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.

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  • Landcrusher Landcrusher on Mar 16, 2009

    I can't wait for the post acquisition coverage. I wonder if all will wait for them to spend their money before reminding the world how totally worthless all chinese piston engines have been to date. $500 motor cycle anyone?

  • Johnny Canada Johnny Canada on Mar 16, 2009
    Geli is short for Angela. Pronounced An-ge-la OK, now I understand. This is just the kind of knowledge I use to impress friends at cocktail parties. Thanks.
  • MaintenanceCosts It's not a Benz or a Jag / it's a 5-0 with a rag /And I don't wanna brag / but I could never be stag
  • 3-On-The-Tree Son has a 2016 Mustang GT 5.0 and I have a 2009 C6 Corvette LS3 6spd. And on paper they are pretty close.
  • 3-On-The-Tree Same as the Land Cruiser, emissions. I have a 1985 FJ60 Land Cruiser and it’s a beast off-roading.
  • CanadaCraig I would like for this anniversary special to be a bare-bones Plain-Jane model offered in Dynasty Green and Vintage Burgundy.
  • ToolGuy Ford is good at drifting all right... 😉
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