Merger in the Works for Volvo, Parent Company?

Steph Willems
by Steph Willems
merger in the works for volvo parent company

Volvo Cars, cast off by a struggling Ford and subsequently picked up by an expansionist Geely 10 years ago, might forge closer ties with its Chinese parent. The relationship could become a marriage.

On Monday, Geely said the two companies have begun talks on turning the two entities into a combined automaker.

In a joint media release, Volvo Car AB and Geely Automobile Holdings Limited stated that the proposed merger would result in “a strong global group that could realise synergies in cost structure and new technology development to face the challenges in the future.”

The combined entity would be listed in both Hong Kong and Stockholm. More importantly for consumers, existing brands would remain unchanged, with Volvo still fielding its electrified Polestar marque.

The upstart Chinese Lynk & Co brand, which still aims to get American consumers on board, will also continue. Currently, no Chinese-brand passenger vehicles are sold in North America, though Europe is no stranger to them. In the past, Volvo and Geely have collaborated on a joint vehicle architecture (CMA), and in 2017 it was learned that Volvo would share engine technology with its parent. All signs pointed to a closer relationship in the future.

Volvo has ambitious plans in the electrified realm; the automaker aims to draw 50 percent of its sales from EVs by 2025. Meanwhile, Geely is a major provider of “new energy vehicles” in its home market, unveiling the new, low-priced Geometry brand in 2019.

“As of the date of this announcement, no concrete timetable or detailed plans of the Proposed Transaction have been formed,” the two automakers stated, adding that any deal would require the sign-off of both companies’ boards. “The Company will make further announcements in relation to the Proposed Transaction if and when required.”

[Image: Twin Design/Shutterstock]

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  • Fred Fred on Feb 10, 2020

    Of course I wonder what that means for Lotus. On the other hand I got my old Elan running after a winter of work, but found some other minor problems to deal with. The joys of a 55 year old British sport car.

  • Dal20402 Dal20402 on Feb 10, 2020

    Geely wants to be one automaker, but it understands that it would take decades (if it were possible at all) for any Chinese brand name to match the brand equity of Volvo in the West. And I expect they probably understand that having the vehicles styled in Sweden is a competitive advantage. Expect to see manufacturing concentrated in China, and design in Sweden.

    • Conundrum Conundrum on Feb 10, 2020

      Why? Volvo has big facilities at "home" in Sweden and especially in Belgium. Plus its US facility. Geely doesn't strike me as a company that would invest so much recently in its European facilities only to abandon them on a whim. It would be terrible PR for a start. Geely has bought almost 10% of Mercedes stock, and is co-operating on the new Smart car, supposedly. If Geely doesn't watch its p's and q's, they'll shoot themselves in the foot with customers who expect the real thing, not some ersatz variety. And Geely doesn't strike me as being run by a fool. What has happened is that virtually all the trim and a lot of components are made in China and shipped to Europe via rail, cutting out local suppliers. There is a two way scheme for bringing Volvos like XC60 made in China to Europe, and taking back models like XC40 made in Belgium to China by rail. China is Volvo's biggest market. But assembly itself continues at the older plants. If you'd said that if by some miracle Volvo car sales increase enough to warrant a new factory, then sure I'd expect that facility to be in China. Personally I find the product ridiculously overpriced for what you get, but customers don't care what I think or what most of the prognosticators around here think, so sales may increase.

  • Conundrum Can't see that the Espada chassis had much to do with the Miura. The Miura had a rear-mounted transverse V12 with the transmission and final drive all part of the engine block. So it's a bit of a stretch saying the north-south V12 and regular transmission Espada chassis was related to the Miura. It looks to be no more than an update of the 400 GT. And short and long-arm independendent suspension was hardly unique -- a '53 Chev had that in front, it was standard for years on most cars that didn't have Mac struts. The Brits call SLA suspension double wishbone, so Honda thought that sounded more mysterious than SLA and used that terminology in ads, but it's the same thing. Only a few mid '30s cars had same length upper and lower A-arms like a '36 Chev, before the obvious advantage of a short upper arm for camber control was introduced. Of course Ford used a dead beam front axle until 1949, so it was last to climb out of the stone age.Do you have a link to a reference that says the Miura and Espada chassis were related?
  • FreedMike One of the things that we here in North America often forget about Europe is that it's a COMPLETELY different world to drive in. Imagine driving in the downtown area of the city you live in 24/7, and never leaving it, and you have a decent simulation of what it's like to drive in a place like Paris, or London, or Rome - or Manhattan, for that matter. As far as the "dystopia" is concerned, I don't really see it that way. This isn't made for people living in the 'burbs - it's for urban dwellers. And for that application, this car would be about perfect. The big question is how successful the effort to provide large-scale EV charging in urban areas will be.
  • Matzel I am hoping that Vee-Dub will improve the UX and offer additional color options for the 2024 Mk8.5 refresh for Canada. Until then, I'll be quite happy with my '21 GTI performance pack. It still puts a smile on my face going through the twisty bits.
  • Stanley Steamer There have been other concepts with BYOT, that I have always thought was a great idea. Replacing bespoke parts is expensive. If I can plug in a standard 17" monitor to serve as my instrument panel, as well as speakers, radio, generic motors, batteries, I'm for it. Cheaper repair, replacement, or upgrade costs. Heck I'd even like to put in my own comfy seats. My house didn't come with a built in LaZboy. The irony is that omitting these bespoke items at the point of sale allows me to create a more bespoke car as a whole. It's hard to imagine what an empty rolling monocoque chassis would look like capable of having powertrains and accessories easily bolted on in my garage, but something like the Bollinger suv comes to mind.
  • Iam65689044 Sometimes I'm glad the French don't sell in America. This is one of those times.