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China’s Economic Crisis Working to Volvo’s Advantage

Swedish maker gets more control from Chinese parent.

by on Aug.24, 2015

A Volvo S60L sedan rolling down the assembly line at the maker's plant in Chengdu, China.

The financial turmoil in China is actually working to the advantage of Volvo Cars. The Swedish automaker, now owned by China’s Geely, is getting more control of key assets, such as its factory in Chengdu, as part of a deal valued at $356 million.

Volvo Cars executives said the decision to take control of its three joint venture operations in China will accurately reflect its growing presence in the Chinese  market . It also fixes the values of the assets in case of a merger or if they are put up as collateral for a major loan in the future, observers said.

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The downside is that Volvo is being hammered, like the rest of the auto industry, by the worst slowdown in the Chinese automotive market in two decades. The downturn could push Volvo to expand plans to export cars from China to the U.S. and other established markets.


Volvo Begins Slow Tease of XC90 Reveal

Swedish maker shows off new crossover’s interior.

by on May.28, 2014

The all-new Volvo XC90 is getting a slow reveal from the Swedish maker. It's revealed the new interior in a series of photos, which will be followed by more information throughout the summer.

Swedish automaker Volvo kicked off the slow reveal of its update of its best-selling XC90 crossover by sharing photos of the interior of the car, which looked…well, Swedish thanks to tiny Swedish flags sewn into the seats.

The new interior is clean and simple. In the early photos released yesterday, the crossover will be swathed in leather and wood. It also features a prominent touch screen display in the center stack that will control a multitude of functions, including the maker’s new infotainment system. The XC90 is designed to accommodate seven passengers and it appears that it’ll do that just fine with seats that appear to recline for all passengers.

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The all-new XC90 is the first Volvo to use the company’s Scalable Product Architecture (SPA), which allows the Swedish company to produce everything from sedans to coupes to this new crossover. This is the first vehicle created under the Geely regime, which bought Volvo from Ford a few years back. (more…)

Volvo’s Chinese Fire Drill

New owner Geely hopes to ignite Volvo sales around the world.

by on Jun.21, 2013

Workers assembling a pilot S60L sedan at the new Volvo plant in Chengdu.

The assembly line creeps along at a glacial pace.  For the next few months, the workers at the sprawling plant on the outskirts of the Sichuanese capital of Chengdu will be carefully trained before the first cars actually roll into Chinese showrooms.

But eventually, if all goes according to plan, the factory will be running at a frantic rate.  Long little more than an after-thought in the global luxury market, Volvo Cars has ambitions to challenge more established brands like Audi, BMW and Mercedes-Benz.

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At least, that’s the goal set by Geely which purchased the Swedish maker from Ford Motor Co. three years ago.  The ambitious Chinese conglomerate plans to invest at least $6 billion to rebuild Volvo, completely updating its product line-up and adding new plants to produce them, starting with the factory in Chengdu and another in China’s Northeast industrial belt.


Geely Investing $11 Bil in Volvo

Plans to rapidly expand Swedish maker’s presence in China.

by on Apr.09, 2012

Geely Chairman Li Shufu and Volvo CEO Stefan Jacoby.

Volvo is about to get a helping hand – a big one – from its Chinese parent, Geely Automobile Holdings, which plans to pump $11 billion into the Swedish maker.

According to a report in Wirtschafts Woche, the investment is intended to increase Volvo’s presence in the growing Chinese market.  Among other things, Geely wants to increase Volvo’s R&D, introduce new technologies and build a new engine plant.  Volvo is planning to migrate to a 4-cylinder-only powertrain strategy in the coming years.

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“We want to revive Volvo and give the brand its strength back,” Geely Chairman Li Shufu told the German weekly.

Exactly where the money will come from is a matter of debate.  While Chairman Li made it sound like Geely will be raising the capital, Volvo Per-Ake Froberg told the Reuters news service that the Swedish maker will have to come up with the capital.


Former Ford, Volvo Designer Peter Horbury Heading to China

Horbury will head styling for aspiring Chinese maker Geely.

by on Nov.02, 2011

Peter Horbury shown here at the 2006 unveiling of the Lincoln Mark S.

He’s already got plenty of stamps in his passport but Peter Horbury will soon add another as he trades Sweden for a new base in China.

The long-time director of design for Gothenburg-based Volvo, Horbury has been named the new styling chief for aspiring Chinese automaker Geely.  But he won’t entirely cut his ties to the land of the midnight sun, as he will also continue overseeing operations at Volvo, which was purchased by Geely in 2010.

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The move underscores the global ambitions of the Chinese maker, considered one of the most promising of that country’s domestic brands.  While it is relying on Volvo as the spearhead in its worldwide assault the Geely Group clearly also wants to build up its original Chinese brand name, as well.


Volvo Planning $10 bil Investment

Swedish maker focusing on China as it sets out to double sales by 2020.

by on Feb.28, 2011

Volvo CEO Stefan Jacoby wants to double sales.

China will play a key role in the planned doubling of global sales for Volvo Cars, the maker’s top executives revealed, as they outlined an ambitious plan to invest at least $10 billion in the company’s future.

That strategy will require a hefty investment by its new parent, China’s Geely Holding Group, said Geely CEO Li Shufu, though he stressed the two firms will continue to operate as “completely independent automaker(s).”

But increasingly, industry observers stress, the future of Volvo and Geely will become inextricably linked.

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“We plan to invest $10 to $11 billion over the next five years globally,” Volvo CEO Stefan Jacoby told the Associated Press.  That money will go towards not only a new assembly plant in China, but also help the maker develop a critical new platform and a new line of powertrains – both of which would be shared among a variety of future Volvo products.


Volvo Aiming To Double Sales by 2020

Swedish maker counting on big growth in China – but U.S. remains critical.

by on Nov.23, 2010

The hare beats the tortoise? Stefan Jacoby plans to get Volvo moving fast under its new Chinese owners.

According to Aesop, it took the slow but steady tortoise to beat the hare.  Don’t count on it, says Volvo Cars’ news CEO, Stefan Jacoby.  In today’s ever more competitive auto market, “the fast ones are eating the slow ones.”

Never known for setting a benchmark pace, the former Volkswagen executive says Volvo now plans to be “leaner, better, smarter and, especially, faster,” as it adjusts to life under Chinese ownership.

Sold earlier this year by Ford Motor Co., which decided it needs to get back to basics, Volvo hopes to more than double sales – to 800,000 annually – by 2020.  That goal will not only require speed by a shift in focus, Jacoby told  Look for Volvo to put more emphasis on emerging markets, including places like Brazil, as well as China.  But, Jacoby cautioned, don’t expect the maker to walk away from the U.S., which has traditionally served as its largest single source of sales.

The sale of Volvo to Zhejiang Geely Holding Group came at a critical came, said Jacoby.  The maker has suffered a significant slide, in recent years, only partially to blame on the global economic downturn.  Global sales are expected to reach just 380,000 for all of 2010, and in the U.S. demand is off almost 60% from its 2004 peak – from 140,000 down to just 60,000.

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But Jacoby is the proverbial optimist, looking at what he sees as a half-full glass.  “We are standing at the bottom looking up,” he said.

Part of the challenge will be to find the way to take advantage of the resources – and potential – offered by the Swedish maker’s new parent and Volvo’s Chinese sibling, the Geely brand.


How Low Can You Go? Try Geely’s $2,250 IG

Chinese maker’s two-door could become world’s lowest-price car.

by on May.07, 2010

Geely plans to put the IG concept into production by 2012, and at price that will likely run under $2,250, possibly as low as $1,500.

Just how low can a carmaker go and still have something that can be called an automobile?

Just days ago, revealed plans by Nissan, Renault and India’s Baja Auto to produce a minimalist model for just $2,500 – about 10% less than the current low-price champ, the Tata Nano.  Now comes word that China’s aggressive little Geely wants to drive the numbers even lower.

Geely – which recently purchased Swedish carmaker Volvo from Ford Motor Co. – is putting a tentative price tag of just $2,250 on a production version of its pint-sized IG concept car.  (Though several sources have quoted figures as low as $1,500.)  And Geely officials insist their planned offering will be more than just a stripped down econobox.

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Set to go on sale sometime in 2012, the IG is expected to feature a modest 70-horsepower, 1.0-liter I-3, which will use a CVT transmission to drive the front wheels.


Chinese Market Defies Gravity

China already bigger than U.S. and the market's still growing.

by on Nov.02, 2009

Workers at a Volkswagen plant, in Shanghai, struggle to keep up with a market that barely felt the impact of the global economic meltdown.

Workers at a Volkswagen plant, in Shanghai, struggle to keep up with a market that barely felt the impact of the global economic meltdown.

U.S. sales numbers for October are due out, starting today, and initial indications suggest it could be one of the first reasonably good months – without federal assistance from the Clunkers program – since the economy began its meltdown.

But while the American market is expected to struggle for some time to come, it’s a very different story, halfway ‘round the world.  China already has surged to the global sales lead, surpassing the States as the globe’s single-biggest national car market.  And, if anything, demand is only growing.

Sales for the first nine months of 2009 have exceeded all of 2008, according to the latest analysis by J.D. Power and Associates, and there is little likelihood momentum will slip in the final months of the year.

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Where even a single-digit gain is big news in the States, September sales, in China, were up an astounding 75%, to 1.26 million.  On an annualized basis, that averages out to 14.9 million vehicles.  And if the growth rate continues, it’s very possible the Chinese market could soon match the best-ever, 17-million numbers set in the U.S. earlier this decade.  A far greater share, however, is made up of commercial vehicles, than in the States.  Power is predicting that on the passenger vehicle side, sales next year will jump 4.6%, to 8.8 million, and that’s expected to reach 12 million by 2016.