Geely's Grand Plans for Volvo

Thor Johnsen
by Thor Johnsen

Reports in the Swedish media have Consortium Jakob AB still in the running to snatch Volvo from Geely. But hiring investment bank Morgan Stanley as collaborators must have spooked Geely — FoMoCo’s “preferred bidder” — and the Chinese automaker has upped the ante with some grand plans for Volvo. Geely is promising to sell no fewer than 1 million Volvos annually within four/five years.According to the Wall Street Journal’s “contact with close ties to Geely,” the planned golden future for Volvo involves increasing sales in China from 12,000 cars this year, to 200,000 within the next three to four years. A new Chinese factory would produce 300,000 units per year, possibly including several larger models. According to one source, the Chinese market still doesn’t perceive Volvo as upscale enough, and these new models would be aimed at giving the brand a “grander,” more aspirational appeal. On the strength of these new models and lower Chinese production costs, Geely plans to more than double Volvo’s world-wide sales (currently about 400,000), making total annual sales a nice round million. And they haven’t forgotten a treat to Volvo and Sweden either: the more sophisticated engineering and high-concept work will be left for Volvo’s domestic workers, you know . . . to keep the workforce in Sweden happy. Though doubling sales in China over a four-year period isn’t the most audacious proposition in the auto industry, more than doubling Volvo sales in Europe and America may prove extremely difficult. After all, offering stretched, chauffeur-driven Volvos doesn’t seem like the key to more US and European success. For now though China is job one for Volvo, and Geely is in the driver’s seat.

Thor Johnsen
Thor Johnsen

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  • Dilbert Dilbert on Nov 11, 2009

    If s/he's dead set on getting a Volvo, now to Dec 31st is a pretty good time to bargain since uncertainty means you have a lot of chips to play with, and the dealer/sales people might not have a job in the near future, so they want to make every penny they can right now.

  • Tosh Tosh on Nov 11, 2009

    Speaking of Volvo getting owned by the Chinese, how's Jaguar getting along with their new owners?

  • VoGhost Fantastic work by Honda design. When I first saw the pictures, I thought "Is that a second gen Acura NSX?"
  • V16 2025 VW GLI...or 2025 Honda Civic SI? Same target audience, similar price points. Both are rays of sun in the gray world of SUV'S.
  • FreedMike Said this before and I'll say it again: I'm not that exercised about this whole "pay for a subscription" thing, as long as the deal's reasonable. And here's how you make it reasonable: offer it a monthly charge. Let's say that adaptive headlights are a $500 option on this vehicle, and the subscription is $15 a month, or $540 over a three year lease. So you try the feature for a month, and if you like it, you keep it; if you don't, then you discontinue it, like a Netflix subscription. In any case, you didn't get charged $500 up front the feature. That's not a bad deal.In my case, let's say VW offers an over the air chip reflash that gives me another 25 hp. The total price of the upgrade is $1,000 (which is what a reflash would cost you in the aftermarket). If they offered me a one time monthly subscription for $50 to try it out, I'd take it. In other words, maybe the news isn't all bad.
  • 2ACL A good car, but - at least in this configuration -not one that should command a premium. Its qualities just aren't as enduring as those of Honda's contemporary sports cars. For better or worse, this is a formula they remain able to replicate.
  • Jalop1991 I just read that Tesla's profits are WAY down "as the electric vehicle company has faced both more EV competition from established automakers and a slowing of overall EV sales growth." This Cadillac wouldn't help Tesla at all, but the slowing market of EV sales overall means this should be a halo/boutique car. Regardless, yes, they should make it.