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Li Shufu to Become Chairman of the Board at Volvo

Hans-Olov Olsson Named Vice-Chairman in peace offering.

by on Jul.15, 2010

"We have made significant progress in assembling the team that will develop Volvo Cars under Geely's ownership."

Zhejiang Geely Holding Group Co., Ltd. today announced Li Shufu, its Chairman, will become Chairman of the Board at Volvo Car Corporation upon its acquisition of Volvo from Ford Motor Company.

Geely also named Hans-Olov Olsson as Vice-Chairman at Volvo Cars. Olsson is a former President and Chief Executive Officer of the Swedish automaker. Olsson was an adviser to Geely on the transaction.

How long the 68-year old Olsson will stay in the newly created position is unknown.

Nevertheless, the move is clearly an attempt to assure Swedish doubts about the sale, and ensure a smooth transition from Ford ownership when the deal closes during the third quarter of 2010. Ford will not retain any ownership in the new Chinese company.

“We have made significant progress in assembling the team that will develop Volvo Cars under Geely’s ownership. Today’s board appointments underline my personal commitment to this famous company,” Li Shufu said.

While the difference between U.S. cultural attitudes of Ford management and Swedish attitudes were significant, it is nowhere near as vast as the differences between the Chinese “middle kingdom” and “Konungariket Sverige.” Whether the Chinese can manage to make Volvo a growing and profitable global car company remains to be seen, and is the subject of great debates among industry observers.

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中国头号!

For the moment, Volvo production in Gothenburg, Sweden and Ghent, Belgium is secure. It remains to be demonstrated that Geely can successfully build Volvo’s in China to Volvo’s quality and safety standards.

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Chinese Auto Market Grows to 40 Million Annually?

Annual vehicle sales to reach 30 million by the beginning of the next decade, 40 million at end. SAIC buys General Motors?

by on Jan.07, 2010

Big country, big population, big growth, and already the world's largest market.

The booming Chinese market will grow to 19 million units of annual sales by 2016, according to the experts from the global auto consultancy practice at PricewaterhouseCoopers.

That would make China the largest maker and consumer of vehicles in the more than 100-year history of the business.

Moreover, you ain’t seen nothin’ yet, at least according to some speculation by me and other sources.

If these pro-Chinese factions are right, the home market could reach 30 million units by 2020 or so, and barring a political upheaval – a genuine risk that virtually everybody acknowledges– it could grow to 40 million units by the end of that decade. Who knows?

This means that Chinese makers will be hard pressed to keep up with internal demand and most Chinese cars — except for maybe the odd few Geely or Chery models — will not be exported. Actually, given their current quality, I argue that  it would be better for established automakers if the Chinese did export large numbers of vehicles  right now. Remember the  Korean-built Hyundai Excel of the 1980s? It was so bad, except for the eastern European Yugo, that it set back Hyundai marketing in the U.S. for decades.

Many of the assumptions made about China are wrong, such as a coming Chinese export wave that enthralls media types and the opining classes, cautions Steve D’Arcy, a partner in PWC’s Global Automotive Practice.

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中国头号!

There will be no massive wave of exports emerging out of China because Chinese makers will barely be able to keep up with burgeoning demand. Hence the 19 million prediction for 2016. As Chinese annual income levels keep rising to equal an average vehicle price of 38,000 RMB or ~$5,600 for a basic car, D’Arcy sees now reason why China won’t remain the world’s largest auto market, he theorized at press luncheon in Detroit today.

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