Forget About Getting Your Hands on a Tiny Slice of Volvo

Steph Willems
by Steph Willems

After hiring financial advisors earlier this year, a move many believed was a precursor to an initial public offering (IPO), Volvo parent company Geely now claims the waters are too choppy to float any shares in the resurgent Swedish automaker.

First reported by the Financial Times this past weekend, the Chinese holding company says there’s too many uncertainties and headwinds in the industry right now. Thus, no Volvo stock for you. The biggest uncertainty is the one that’s keeping automakers on edge the world over.

The thorny issue of trade rears its head here, with the U.S.-China trade war and concern about American relations with Europe heading down a similar path factoring into the decision, the automaker claims. The trade situation led to nervous investors and a weakening of automotive stocks, serving up another warning sign for Volvo’s parent.

Now postponed indefinitely, a Volvo IPO could still come to pass after the global situation stabilizes.

“We’ve come to the conclusion that the timing is not optimal for an IPO right now,” Volvo Chief Executive Hakan Samuelsson told Reuters. Sources said Geely planned to value Volvo at $16 billion to $30 billion — a figure some analysts questioned. While Volvo has said it will tailor XC60 production to avoid pricey tariffs, Geely boss Li Shufu apparently feels the Volvo brand isn’t yet big enough in the world’s largest auto market (China), other sources claim.

Volvo’s volume in China is nowhere near as high as its established German luxury rivals. Still, Samuelsson seemed most concerned about large Swedish public pension funds buying up Volvo stock, only to have the deflated market kibosh a quick return.

[Image: Volvo Cars]

Steph Willems
Steph Willems

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  • Thegamper Thegamper on Sep 10, 2018

    I would say they finally have a winning portfolio of vehicles, but yeah, to much up in the air in the auto industry. Not just Chinese tariffs. Not to mention that Volvo still needs more volume. I don't really know what global sales are, but Would think they are way down there toward the bottom. If I cant have the stock, which I doubt I would purchase anyway, I would very much like to own a new Volvo. I am patiently awaiting the V60.

  • Don1967 Don1967 on Sep 10, 2018

    The time to sell - er, issue an IPO - is when the big money has already been made and the greater fools are lining up to fund your retirement. Volvo might be on an upswing in 2018, but when it comes to attracting Dumb Money it can't compete with Tesla, Bitcoin or medical marijuana.

  • Asdf Asdf on Sep 10, 2018

    Volvo is not a Swedish automaker, but a CHINESE automaker.

    • See 2 previous
    • Inside Looking Out Inside Looking Out on Sep 10, 2018

      @barksdale I can add more: European Polaroid, Chinese Kodak, Japanese Xerox. BTW who owns GE? Is it Chinese company too?

  • Advance_92 Advance_92 on Sep 10, 2018

    I wonder if Volvo is thinking they should have built that S60 factory in Halifax.

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