Volvo to go to the Chinese??

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http://www.caradvice.com.au/55601/ge...parate-entity/

Geely to keep Volvo a separate entity
February 3, 2010 by Adam Marshall


The new owners of Volvo, Chinese manufacturer Geely want to keep Volvo a separate entity in order to protect the Swedish manufacturer’s image in the European and North American markets as well as China.



“We want to be careful not to damage the Volvo brand,” Freeman Shen, Geely’s vice president for international operations said. Shen was educated in the United States and was formerly in charge of Fiat Powertrain Technologies in China.

There has been concern over Geely’s ability to maintain Volvo’s upmarket position, Geely has plans to open a Volvo assembly plant in China. Shen said that the Geely line-up and the Volvo operation would be run independently. Geely will be gaining technologies from Volvo, engineering, safety and assembly know-how but not at the expense of its own products.



“We don’t want the image of a luxury car made in a third world country,” Shen said. “We want the image of a European luxury car, albeit owned by a Chinese owner.”

It is expected Geely will sign the deal to buy Volvo from Ford around the middle February, most likely to occur within hours of GM’s sale of Saab’s to Spyker.

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http://www.caradvice.com.au/60163/ge...l-in-progress/

Geely Volvo deal still in progress

March 8, 2010 by Alborz Fallah

Swedish vehicle manufacturer Volvo was suppose to have been sold to China’s Geely Automobile Holdings last month, but the Chinese company is still to sign an agreement with Ford Motor Co.

Despite previously suggesting the deal would be complete by end of February, Zhejiang Geely Holding Group says work is still on track for the agreement, even though an official agreement has not been signed to date.

Geely is currently China’s biggest privately owned car manufacturer and agreed to pay $2 billion USD for Volvo by May. The idea is to produce Volvo cars at double the current rate by utilising a new factory in Beijing. Geely believes it can make Volvo profitable by 2011.

Last month saw the Sichuan Tengzhong Heavy Industrial Machinery Co’s deal for Hummer fall through partially due to no support from the Chinese government. Geely says it has obtained some of the regulatory approvals but details are sketchy.

[Sprint XR8]

Geely Has The Cash For Volvo… So Where’s The Deal?

By Edward Niedermeyer on March 10, 2010
Reuters (which has been all over the Volvo-Geely deal) reports that Zhejiang Geely Holding has money “in the bank account,” to purchase Ford’s Volvo brand, citing Swedish press reports. And yet, despite having reportedly given Ford guarantees about the financing of Volvo’s business plan, and scheduled a formal deal signing for last month, a deal has yet to emerge. Last week, Geely’s chairman Li Shufu told Reuters from the sidelines of the National People’s Congress in Beijing that “we haven’t reached a final agreement so far,” but “everything is moving as planned.” Geely has also been talking up its “only one foreign brand” strategy and “new energy” car plans, while Volvo reps tell AM Online that a deal will be done by March 31 and that Chinese market access will save the brand [via The WSJ [sub]]. In fact, the only party involved that’s not issuing a steady stream of PR about the upcoming deal is Ford. Could the Blue Oval be getting cold heels?

Automotive News Europe [sub]’s Luca Ciferri reckons that if Ford isn’t having second thoughts, it probably should be. Noting the collapse of almost every auto brand sale that’s been attempted over the last two years, Ciferri gives five reasons for Ford to interruptus the deal before it’s too late.

1) Ford is already rid of its most expensive and most time-consuming distractions – Aston Martin, Jaguar and Land Rover – so it has more time to concentrate on the Blue Oval.

2) Volvo is much more integrated within Ford in terms of platforms and engines than the three British brands.

3) Volvo’s near-premium market position is more coherent with what the ONE Ford plan aims to achieve globally.

4) Volvo is still Ford’s center of competence for safety, an area that has taken on a whole new level of importance as we watch Toyota’s reputation for reliability ravaged by its sticking accelerators and poor-performing brakes.

5) Volvo has its most complete and diversified product portfolio ever featuring a small car, the C30; large cars, the S80 and S60; a coupe-cabrio, the C70; and two stylish crossovers, the XC60 and XC90.

To which we would add that Ford’s circumstances today are considerably less dire than they were when it put Volvo on the market in December 2008. And the fact that Ford’s luxury divisions aren’t even close to where they need to be to compete globally. And that ONE Ford is turning out to be a little more nuanced than Ford initially let on. And won’t someone think of the technology?

On the other hand, $2b probably sounds too good to turn down, given all the nasty leverage on Ford’s books.

In the meantime, Tradingmarkets is out with the news that Ford’s current Volvo joint venture with China’s Chang’an is changing over their Mondeo production line to produce the brand new Volvo S60 in early 2011. That car, equipped with the latest in gadgetry, had been the center of much speculation about giving carefully guarded intellectual property to the wicked Chinese. It will have the prize-winning “Adaptive Cruise Control” (great for Chinese traffic jams,) its “Pedestrian Detection with Full Auto Brake” will be welcomed in pedestrian China.

Geely is taking the position that once they have bought Volvo fair and square, it will also include “the ownership of existing technologies in the fields of safety and environmental protection, as well as technologies of new car models.”

And let’s not forget that once the deal is closed, Geely owns 100 percent of Volvo, and hence one half of the joint venture with Chang’an. This will be interesting. And maybe it will be another step towards the consolidation sought so much by the Chinese government.

http://www.thetruthaboutcars.com/gee...l/#more-348434

[vztrt]

http://theage.drive.com.au/motor-new...0329-r5i9.html

China's Geely seals Volvo Cars takeover
March 29, 2010 - 10:33AM

Geely chairman Li Shufu said he saw huge untapped potential for Volvo in international markets and especially in China, which has not only the biggest but also one of the fastest-growing car markets in the world.

"I see Volvo as a tiger. (The) tiger belongs to a forest, it can't be found in a zoo ... We need to liberate this tiger," he told a press conference after the deal was inked at Volvo Cars headquarters in Gothenburg, southern Sweden.

"The tiger has a heart and it lies in Sweden, (and) in Belgium but it's power should be projected all over the world.

"I see China as one of the markets where Volvo can show it has the opportunity to liberate itself," he said.

In the face of concerns that the Chinese group would slash jobs in Sweden, Geely said it would keep Volvo Cars plants in Sweden and Belgium and was considering opening factories in China for the local market.

Geely said it had not only secured financing for the $US1.8 billion it was paying Ford Motor Company for Volvo, but was also eager to keep the loss-making Swedish carmaker in operation.

It also said the deal, which Ford initially agreed to in December, included agreements on intellectual property rights as well as supply and research and development arrangements between Volvo Cars, Geely and Ford.

The deal will bring to an end Ford's decade-long association with the premium Swedish brand, known for its sturdy, family-friendly cars.

For Geely, which started as a refrigerator parts maker, the deal marks a new chapter in its international expansion after two of its Chinese rivals failed to take over Western brands, Hummer of the US and Saab of Sweden.

The deal had initially caused consternation among unions at Volvo Cars, which employs about 22,000 people worldwide, including 16,000 in Sweden.

Unions had voiced opposition to the deal on grounds that it was vague on expansion plans and possible layoffs.

Three Volvo unions this week pressed for details "on the capital that will finance Volvo's daily activities, investment on future projects and the production target of 600,000 vehicles by 2015".

On Saturday they pronounced themselves satisfied.

In addition to preserving Volvo Cars' factories in Sweden and Belgium, Geely said the Swedish company would be run as a separate company with its headquarters in Gothenburg.

With a workforce of 12,000 people, including 1600 engineers, the Geely group has grown into one of China's largest private carmakers since it launched its auto manufacturing business in 1997.

It operates six car assembly and power-train manufacturing plants across China with a combined production capacity of 300,000 cars per year. The firm also owns nearly 500 dealerships and 600 service stations in the country.

Geely has an overseas sales and service network of nearly 300 outlets and runs plants in foreign countries including Ukraine, Russia and Indonesia. Overseas sales have totalled less than 200,000 units.

AFP

[z80]

Ford reached agreement to sell its interest in Volvo to the Chinese today.


Now that is going to be very interesting seeing that the Chinese have the completely opposite safety reputation at the moment.

[Bushbasher]

Lets hope the chinese take on some of the philosophy of Volvo and not the other way round.

[vztrt]

http://theage.drive.com.au/motor-new...0330-r8qv.html

Chinese company takes wheel at Volvo
ANDREW HEASLEY
March 30, 2010

Ford has agreed to sell Volvo, its loss-making Swedish car brand, to the Chinese car maker Zhejiang Geely Holding Group for $US1.8 billion ($2 billion).

The sale represents but a fraction of the $US6.45 billion Ford paid for the brand in 1999.

The sale might not bolster Ford's coffers as much as first appears: the cash component of the sale, $US1.6 billion, (the other component is a $US200 million note) will be adjusted to take into account Volvo's pension deficits, debt, cash and working capital, and might result in ''a significant decrease" in proceeds to Ford, the US car maker warned.

The deal, which requires regulatory approval and is expected to be concluded in the third quarter of this year, gives the fast-growing Chinese maker Geely rights to use Volvo's intellectual property in safety, engineering and environmental technologies.

But it also offers the opportunity for technology transfers to Volvo cars in frontier technologies such as electrification, which the Chinese makers are rapidly developing.

Volvo cars will continue to be built in Sweden and Belgium for the European market, and in China for its domestic market.

Once the sale is completed, Volvo's management group in Gothenburg will work to a new board that will report to Zhejiang Geely Holding Group in Hangzhou, China.

The chairman of Zhejiang Geely Holding Group, Li Shufu, said: ''This famous Swedish premium brand will remain true to its core values of safety, quality, environmental care and modern Scandinavian design. Volvo will be … tapping into the opportunities in the fast-growing China market.''

The Volvo sale completes Ford's exodus from the so-called premium segment of the market, after having sold Aston Martin to a private consortium in 2007 and Jaguar and Land Rover to Tata, the Indian car maker and industrial conglomerate, for $US2.4 billion in 2008.

It is part of Ford's quest to consolidate its business, under the banner of ''One Ford'', to streamline the range of cars into fewer, global models and eradicate niche products, following the depths of the global financial crisis.

Ford's chief executive and president, Alan Mulally, said: ''The sale of Volvo will allow us to further sharpen our focus on building the Ford brand around the world and continue to deliver on our One Ford plan.''

While the sale means Ford will no longer have any ownership interests in Volvo, it will continue to supply Volvo with engines, transmissions, stampings for differing periods, and engineering, computing and tooling for a ''transition'' period.

Volvo Car Australia's managing director, Alan Desselss, welcomed the announcement.

''This has been going for quite some time, though not yet finalised, it's certainly good that it's come to conclusion, and I think

the prospects are extremely positive for Volvo.''

It would be ''business as normal'' with supply, parts, warranties and dealerships, and he expected no immediate impact on production.

''The unions in Europe have now endorsed the whole sales process,'' he said. ''Geely, in turn, are very keen to continue business as usual.''

It was too early to speculate whether Geely cars would be sold alongside Volvos in dealerships, he said. ''I don't think that's the intention at this stage,'' Mr Desselss said.

Volvos imported to Australia are expected to continue to be built in Europe, rather than in China, as Chinese cars are left-hand-drive, and Volvo already made right-hand-drive cars in Europe for the British market, he said, and did not expect any sudden change of the models made as a result of the sale.

''When the deal was concluded, Zhejiang Geely were very aware of the model line-up that we had and the model strategy we had for Volvo cars, and that's what they've bought into, and they'd like to see it going on into the future. With the sale, it will only secure the future further.''

In Australia Volvo achieved sales growth of 4.5 per cent last year, due primarily to one model, the XC60 soft-roader. It accounted for 1261 of the 4668 cars sold last year, while other models in the range declined.

The sale to Geely does not affect Volvo trucks, buses or construction equipment.

Bloomberg

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http://www.caradvice.com.au/76235/fo...ing-next-week/

Ford to finalise Volvo sale to Zhejiang Geely Holding next week
By Brett Davis | July 29th, 2010 Leave a Comment

Ford has almost completed the sale of Volvo to China’s Zhejiang Geely Holding Co. for US$1.8 billion. The sale is expected to be finalised next week.

It’s not a matter of how much money Ford will profit from selling the Swedish company, it’s a matter of how much Ford will lose as it prepares to finalise the deal for one third of the price it originally bought the company for in 1999.

The deal is said to be part of Ford Motor Company’s plans to remove itself from all European luxury brands. Since Chief Executive Officer of Ford, Alan Mulally joined the company in 2006, his strategy has long since been selling brands like Aston Martin, Land Rover and Jaguar. Ford has reported these European brands didn’t generate the kind of sales and profits initially projected.

Although the independence presented by the sale may suggest Volvo will be releasing all-new models in the futre, Ford will continue to provide Geely with engines, transmissions and other major foundations. Ford is also reported to have offered engineering and technical support to Geely for an unknown period.

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http://www.autoblog.com/2010/07/29/v...ose-next-week/

Volvo sale to Geely to close next week?

by Zach Bowman (RSS feed) on Jul 29th 2010 at 4:31PM

Volvo may finally part ways with Ford by the end of next week. The Detroit Free Press reports that the Blue Oval is aiming to close its $1.8 billion sale of the Swedish automaker to Geely in as little as 10 days, though Ford has merely said that its goal is to hand over the Volvo reigns by the end of the third quarter of this year. The move to send Volvo packing is part of Ford CEO Alan Mulally's strategy to slim the company down to focus on its core brands – a scheme that seems to be working so far.

In the meantime, Volvo managed to turn a profit of $53 million before taxes in the second quarter of this year. The news is a big leap from the same time last year – in the second quarter of 2009, the brand lost a heady $237 million. Ford's sale of Volvo seems to have been on glacial pace, partly due to the number of government agencies in the U.S., Europe and China that were needed to sign off on the deal. By the time the ink dries on the last document, Geely will have secured the largest overseas acquisition of any Chinese automaker so far.

[Source: The Detroit Free Press]

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And sold!

http://www.autoblog.com/2010/08/02/f...eely-for-1-8b/

BREAKING: Ford officially sells Volvo to Geely for $1.8b

by Damon Lavrinc (RSS feed) on Aug 2nd 2010 at 7:46AM

After months of protracted negotiations, Ford has officially sold Volvo to Zhejiang Geely Holding Group Company Limited – aka Geely – for $1.8 billion.

The Chinese automaker originally included a $200 million note and the balance in cash, and today, it paid the remaining $1.3 billion to wrap up the sale, although the final sale price won't be released until later this year and could put more cash in the pockets of FoMoCo.

Under the terms of the sale, Ford will continue to supply Volvo with everything from powertrains to stamping systems and other vehicle components for differing periods of time. Additionally, Ford and Geely have come to an agreement on intellectual property usage, with Volvo allowed to grant sub-licenses to specific systems to third parties, including Geely.

[Fled74]

What will this mean for the Volvo engine in the Focus XR5?

[DJR-351]

Originally Posted by Fled74

What will this mean for the Volvo engine in the Focus XR5?

Dunno... but we could be looking at a bunch of Ford fanatics drooling over a small hatchback powered by Chinese built Volvo engines, who would have thought that 5 years ago....

[irlewy86]

Originally Posted by Fled74

What will this mean for the Volvo engine in the Focus XR5?

I thought the 2.5l Duratech was biting the dust next year and being replaced by 2.0 Ecoboost anyway.

[vztrt]

Originally Posted by irlewy86

I thought the 2.5l Duratech was biting the dust next year and being replaced by 2.0 Ecoboost anyway.

I believe the ecoboost will replace the 5cyl in the Focus and Mondeo.

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Official: Geely buys Volvo

http://www.goauto.com.au/mellor/mell...25777400167990

China’s Geely finally buys Volvo from Ford, as US VW chief takes Swedish reins

3 August 2010

By MARTON PETTENDY

SWEDEN’S largest car-maker formally changed hands this week with Ford completing its drawn-out sale of Volvo Cars to China’s Zhejiang Geely Holding Group.

Ford said it would receive $US1.8 billion ($A1.978b) for Volvo, for which it paid $US6.5 billion ($A7.144b) in 1999 before it divested its ownership of Aston Martin in 2007 and Jaguar Land Rover in 2008.

Geely, meantime, has named Volkswagen Group of America chief executive Stefan Jacoby as the new president and CEO of Volvo Cars, replacing Stephen Odell, who is returning to Ford as chairman and CEO of Ford of Europe.

Ford Motor Company CEO Alan Mulally said Volvo was an excellent brand with a strong product line, returning to profit after a successful restructuring.

“We are confident Volvo has a solid future under Geely's ownership,” he said in a statement.

“At the same time, the sale of Volvo will allow us to sharpen our focus on the Ford brand around the world and continue to deliver on our One Ford plan serving our customers with the very best cars and trucks in the world.”

Ford has not retained any level of Volvo ownership, but said its agreement with Geely, which plans to launch its own vehicle brand in Australia this year and also owns Australian transmission maker Drivetrain Systems International (DSI), will allow both Volvo and Ford to establish “the proper use of each other's intellectual property”.

Ford said it would cooperate with Volvo in several areas to ensure a smooth transition, including the continued supply of powertrains, stampings and other vehicle components.

During the transition, Ford will also provide engineering support, information technology, access to tooling for common components and other selected services.

Volvo’s finance chief Stuart Rowley will return to Ford’s European division with Mr Odell. Mr Rowley will be replaced by Volvo’s deputy chief financial officer Hans Oscarsson, who will be acting CFO.

“Volvo is a proud company with a talented and dedicated team of employees,” said Mr Odell. “I am especially pleased that with Ford's continued investment in recent years, Volvo is well positioned for the future with an exciting range of products that remain true to its core values – safety, quality, environmental responsibility and modern Scandinavian design.”

Geely Holding Group chairman Li Shufu, who has been dubbed the Henry Ford of China, has been named chairman of Volvo.

“This is an historic day for Geely, which is extremely proud to have acquired Volvo Cars,” said Mr Li after a signing ceremony in London also attended by Ford’s chief financial officer Lewis Booth, after more than a year of talks.

“The signing and completion of this acquisition reflects the commitment of Ford and Volvo executives to the future of this company, along with the vital input of labour representatives and government officials in Sweden, Belgium and China as well as other relevant countries.

“This famous Swedish premium brand will remain true to its core values of safety, quality, environmental care and modern Scandinavian design as it strengthens the existing European and North American markets and expands its presence in China and other emerging markets.”

Mr Jacoby, whose replacement at VW USA has not been named, said he was honoured to head up Volvo in Gothenburg from August 16.

“I am honoured to join a company with the prestige and growth potential of Volvo,” he said. “Our employees, suppliers, dealers – and above all our customers – can be confident that Volvo will preserve its special status as the industry leader in vehicle safety and innovation – even as it pursues new market opportunities.”

After the 100 per cent ownership transaction of Volvo, Mr Jacoby will join the board of Volvo, which will comprise several new directors including Hans-Olov Olsson, a former president and chief executive of Volvo Cars and a former chief marketing officer at Ford, who will become vice-chairman of the board.

Under the new ownership arrangement, Geely said Volvo will retain its headquarters and manufacturing presence in Sweden and Belgium, and “its management will have the autonomy to execute on its business plan under the strategic direction of the board”.

Established in 1986, Geely was one of the fastest growing brands in the world’s largest vehicle market last year, but faces a challenge to return Volvo to profitability.

Volvo posted revenue of $US12.4 billion ($A13.625b) in 2009 by selling 334,000 cars, but recorded a pre-tax loss of $US653 million ($A717.5m).

Volvo was profitable in the first two quarters of this year, when it sold 191,832 vehicles (up 20 per cent on 2009 figures), but last posted a full-year operating profit in 2005, when it lodged a pre-tax profit of $US377 million ($A414m).

On top of the circa-$2 billion it paid for Volvo, Geely has said it will invest up to a further $US900 million ($A989m) to both increase its presence in international luxury car markets and nearly double annual production at its new Volvo China plant.

China is already Volvo’s fourth largest market, aided last year by an 88 per cent sales surge (to 15,497 vehicles) on the back of Volvo’s new China-only long-wheelbase S80L, but Geely hopes to sell 150,000 Volvo cars in China annually by 2015.

Automotive News reports that a number of Chinese cities – including Beijing, Shanghai and Chengdu – are courting Geely for a new Volvo manufacturing site. China’s S40 and S80L are built at a joint-venture factory owned by Ford and Chongqing Changan Automobile Co, which Volvo will continue to employ.

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http://theage.drive.com.au/motor-new...804-116ne.html

China's Geely signals new era for Volvo August 4, 2010 - 9:31AM

Sweden's Volvo has entered a new era under the ownership of China's Geely, turning its sights to the world's largest car market.

After a lost decade as a Ford brand, Sweden's Volvo has entered a new era under the ownership of China's Geely, turning its sights to the world's largest car market.

"This is a historic day for Geely, which is extremely proud to have acquired Volvo Cars," Geely Group chairman Li Shufu said in a statement.

He promised continuity for Volvo but also stressed Geely's ambitions for the brand in China's booming market.

Known for its family-friendly cars, Volvo "will remain true to its core values of safety, quality, environmental care and modern Scandinavian design as it strengthens the existing European and North American markets and expands its presence in China and other emerging markets," Li said.

Geely said on Monday it paid $US1.5 billion ($A1.64 billion) for Volvo, less than a quarter of what US auto giant Ford paid for the Swedish company in 1999.

The deal will give the ambitious Chinese a brand known for its safety and sturdiness, key attributes in building its position among Chinese carmakers.

Although complementary, the two brands could not be more different - Geely has a mere 13 years of experience in the luxury car market and sells fewer cars than its new purchase, which was founded in 1927.

Li earlier told China's official Xinhua news agency that he hoped to see the struggling Swedish brand regain its former strong reputation.

"After the takeover, Geely remains Geely and Volvo is still Volvo. The relationship between the two companies is brotherhood and not a parent-and-child relationship," Li was quoted as saying.

The Swedish brand will keep its headquarters and plants in Sweden and Belgium; management will retain autonomy under a board headed by Li.

Geely named German Stefan Jacoby, the head of Volkswagen in America, as Volvo's new president and chief executive.

Geely paid $US1.3 billion ($A1.43 billion) in cash along with a note of $US200 million ($A219.25 million), less than the $US1.8 billion ($A1.97 billion) price tag announced on March 28.

Geely said this reflected "adjustments in areas such as pension obligations and working capital."

Geely also said it would invest $US900 million ($A986.63 million) to improve the brand.

Both the European Union and China cleared the takeover last month.

Swedish union IF Metall said it welcomed news that Volvo's headquarters would stay in Sweden and hoped the carmaker's entry into the Chinese market would have a positive effect for employment.

"It is good that the deal has now been completed. It gives peace of mind to the employees who have been waiting for a long time for a clear answer," union chairman Stefan Loefven said in a statement.

Loefven, who is scheduled to visit China in coming months, added that the union expected the new owners would work according to the Swedish model "in which unions and businesses have close and developed relationships."

Geely, founded in 1986, has become one of China's biggest private car makers since launching its auto manufacturing business in 1997.

It sold 326,710 cars last year but has never managed to sell more than 200,000 abroad.

Volvo has been losing money since 2005 and sales were weak in 2008 and 2009 but bounced back 20 per cent this year as the global economy picked up.

Dong Yang, executive vice president of the China Association of Automobile Manufacturers, meanwhile told Xinhua that maintaining Volvo's brand and product quality would be a difficult task.

He said raising Volvo's market share in China and adapting the European brand to China would not be easy.

"All of these things should be realised step-by-step through hard work," Dong was quoted as saying.

[vztrt]

http://www.autoblog.com/2010/08/04/r...s-class-rival/

Report: Volvo's new chairman wants 7-Series, S-Class rival

by Zach Bowman (RSS feed) on Aug 4th 2010 at 1:31PM

Geely isn't wasting any time in shaping up its newest acquisition's product line. The Chinese automaker officially completed its deal to purchase Volvo from Ford earlier this week, and already the Swedish brand's new chairman is making noises about a new large luxury sedan to go toe to toe with the likes of the BMW 7 Series and Mercedes-Benz S-Class. Li Shufu, Volvo chairman and co-chair of Geely, said that the brand already competes with luxury German carmakers in most markets, but lacks all of the hardware to do so effectively. To remedy the problem, Li wants to put the rush on a new saloon to take the fight to the Bavarians.

According to the Financial Times, Volvo repeatedly ran into roadblocks when it attempted to develop a large four-door under Ford. Evidently the Blue Oval was concerned about a long-wheelbase Swede nabbing sales from Jaguar – another brand Ford owned at the time. A new Volvo sedan is far from a done deal, though. Li says that the thought of a range-topping sedan is his, and he'll have to convince the company's new board to give it the green light. With an ambitious goal to double Volvo to 600,000 units in five years primarily through growth in large-car loving China, a D-segment player sounds like a good bet – at least for select markets.

[vztrt]

Volvo brand to ‘sharpen’ under Jacoby

http://www.goauto.com.au/mellor/mell...2577840017913C

Alliances on the table as new Volvo boss sets out to better define Swedish brand

19 August 2010

By TERRY MARTIN

VOLVO Car Corporation’s new president and chief executive, Stefan Jacoby, has set about “sharpening” the Swedish brand’s position and will consider partnerships with other car companies to gain economies of scale.

In his first press conference as CEO, the former Volkswagen executive said his main focus was on future models and that he would develop a strategy to ensure the Swedish brand was better represented in global markets, including China.

Mr Jacoby was appointed to lead Volvo into a new era after China’s Zhejiang Geely Holding Group Co earlier this month finalised a $US1.8 billion ($A2b) purchase deal with Ford Motor Co.

Since then, Geely (and now Volvo) chairman Li Shufu has made it clear that he wants Volvo to move further upmarket into the full-size limousine sphere, producing “high-level cars that compete with the Mercedes S-class and BMW 7 Series”.

This will be important for Volvo’s aspirations in the booming Chinese market, although Mr Jacoby insisted overnight that the company would not simply copy others and was working on finding its own “Swedish-based definition” of what the brand and its products should deliver.

“We need to have an intensive discussion within Volvo to further sharpen the brand position,” he said.

“This is one of the earliest priorities which I have set for myself and for the new management team – to discuss and to define what Volvo stands for.

“It is also important because we want to enter into new markets, so we have to take the Chinese market and their customers into consideration as well and look for our opportunities in this market.

“I also believe that by just looking into the so-called premium segment, and copying our core competitors, cannot be the solution. We cannot say, well, just do what BMW is doing ... we need to find our Swedish-based definition of what Volvo should deliver in the future to their customers.

“And it needs to be a unique positioning – we cannot be just a copy of other brands, we need to find a Volvo definition of what premium stands for.”

While not being specific on future models, Mr Jacoby said “our main focus in the next months, and in the next years, will be product, product, product” and that although existing customers had a strong emotional attachment to the brand, and valued aspects such as safety and reliability, the current position “is maybe not sharp enough to attract customers in the future as well”.

“Only through our products can we actually make our future happen, and make it actually bright,” he said. “We need to have to a solid product strategy which actually delivers our vehicles on a global scale, including China of course.”

Key to this will be finding new economies of scale, which Mr Jacoby said could take the form of partnerships with other car companies.

“Scale of economies is one of the key factors in having a competitive cost base,” he said. “But what we need to see, and what we need to understand as well, is that size and volume and brand portfolios also brings, for such a corporation, complexity – and reduces the speed.

“And I think this is the opportunity which we have as a little ‘David’ in this industry, that we can have a management style which is lean and which is quick, and which actually sets the pace in the industry.

“So we have advantages, and we have to look for smart, intelligent solutions to overcome the obvious disadvantages with not having this kind of scale of economies.

“There are opportunities to co-operate with suppliers, with maybe other competitors as well, but also, of course, to find synergies with our sister company Geely.

“Our Chinese investment also offers opportunities to source out of the Chinese market as well, which also will bring us a better cost basis.”

Mr Jacoby refused to be drawn on sales forecasts for Volvo under the new regime, saying it was too early, although Geely’s plan includes almost doubling Volvo’s annual global production, including building a new plant in China.

He also dismissed speculation that surfaced during the company sale process that Volvo could merge completely with Geely.

“I think Li Shufu clearly understands the value of the Volvo brand,” he said.

Volvo has not posted a profit since 2005. It sold around 334,000 cars last year, down from a peak of 458,000 in 2007.

In Australia, Volvo Car sales are up 6.8 per cent year to date, with just over 2700 sold to the end of July. Last year it managed almost 4700 sales to be 4.5 per cent ahead of 2008.

[roadrage77]

That would explain the cheapness of build-quality amongst the current crop of Volvos.

[vztrt]

Originally Posted by roadrage77

That would explain the cheapness of build-quality amongst the current crop of Volvos.

No that would be them being owned by Ford actually.

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http://www.autoblog.com/2010/09/07/r...olved-by-2012/

Report: Geely to be dissolved by 2012

by Jeff Glucker (RSS feed) on Sep 7th 2010 at 4:31PM

Geely Automotive Holdings, one of the four largest automakers in China, has announced that it will dissolve the Geely brand by 2012. The other brands under the Geely umbrella are Gleagle, Emgrand, Englon and now Volvo. The goal is to let the sub-brands emerge and strengthen sales while the Geely models fade away.

Gleagle, short for Global Eagle, is the automakers global brand, while Emgrand offers luxury options. The Englon division is responsible for the London Taxi-esqu TXN and TX4. The existing Geely Freedom Ship and Yuan Jing are going to be turned into Gleagles while the King Kong and Golden Eagle models will become Englons. If this all sounds terribly confusing to you, don't be alarmed this just means you're normal.

As the Geely brand dissolves, the company will focus on assisting their existing dealerships achieve greater levels of profitability and service. Also, they will begin to increase the number of Emgrand dealerships from 200 up to 250.

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http://www.autoblog.com/2010/09/11/g...lion-eib-loan/

Geely-owned Volvo seeks €600 million EIB loan

by Jonathon Ramsey (RSS feed) on Sep 11th 2010 at 2:12PM

Volvo received a €200 million loan from the European Investment Bank in March of this year, and sought another €300 million to cement its finances as it navigated the process of being sold by Ford. The rest of the funds were put on hold as Ford concluded the deal with China's Geely, but now that the sale is complete Volvo is ready to take delivery of the additional sum.

Geely-owned Volvo has revised its product timeline compared to when when it first applied for EIB assistance, however. As a result, it now seeks €600 million. At the moment, the process is on hold while Geely discusses loan guarantees with the Swedish government, but perhaps that extra dosh – assuming it's approved – will help pay for Volvo's 7 Series and S-Class competitor.

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http://www.caradvice.com.au/83386/vo...hinese-plants/

Volvo to be built at three Chinese plants?
By Alborz Fallah | September 14th, 2010

t’s hard to know where your new car comes from these days. Although a certain brand may be European in its origin, it’s likely that certain models aren’t actually being built in Europe. This is the case with some German cars that come out of either the United States or South Africa. Volvo, which has traditionally been a Swedish brand, will soon be built at three Chinese plants if new owners Zhejiang Geely Holding Group have their way.

The Chinese bought Volvo from Ford Motor Co. in August and expect to manufacture up to 300,000 of the cars at three plants planned for China.

So far the company has not confirmed the plans (which will need approval from Volvo’s board as well as the Chinese government), but is looking at the southwestern city of Chengdu, the Jiading district and the northeastern city of Daqing for possible plant locations.

Although it’s likely that all Chinese produced Volvos will be for the domestic market to start with, in the near future it may be very likely that Australia will source its Volvos from China. So the question has to be asked, would you buy a Chinese built Volvo?

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http://www.caradvice.com.au/91901/vo...ding-in-china/

Volvo to double sales by 2020 through expanding in China
By Brett Davis | November 19th, 2010

Volvo is aiming to almost double sales by 2020, bringing the total to 800,000 units per year. The company plans on doing this by expanding its operations in Europe and, especially, in China.

Zhejiang Geely Holding Group Company bought Volvo off Ford earlier this year for $1.8 billion, but disagrees with these plans. President of Geely Holding, Li Shufu, wants Volvo to expand its range to include larger luxury vehicles to rival the German offerings, such as the Mercedes-Benz S-Class and the BMW 7-Series.

On the other hand, chief executive officer of Volvo, Stefan Jacoby, recently said at the Los Angles Auto Show,

“If we play our cards right, I can imagine selling 800,000 by 2020.”

This figure is more than double of what the company currently sells – around 380,000 per year. But Jacoby has different plans to ramp up sales. He says Volvo’s current market isn’t interested in large cars, and wants the company to keep making small, fuel efficient models.

The company will expand manufacturing in China, and plans to open up two new assembly plants and expand a third plant in China. The Chinese market has bought 22,700 vehicles so far this year.

Jacoby, a previous Volkswagen employee, says Volvo will announce its production facility plans in the next four weeks.

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http://www.autoblog.com/2011/05/12/v...n-for-cy-2010/

Volvo earns $103M in Q1, $370 million for CY 2010

by Chris Shunk (RSS feed) on May 12th 2011 at 6:01PM

Volvo has posted a solid first quarter, with earnings jumping to $103 million. That's nearly double the Q1, 2010 totals, in part due to continued strong demand for its XC60 crossover. The Geely-owned automaker expects the revenue to continue to flow throughout 2011, as the automaker is hoping to increase sales by 70,000 units on the year to 450,000 units.

Volvo has also announced total earnings for calendar year 2010. The automaker says it earned $370 million on the year, again in part because of strong XC60 sales and the successful launch of the S60. High commodity prices weighed down earnings a bit, but the automaker says strong net pricing largely offset the rising price of energy and steel.

Hit the jump to read over Volvo's 2010 earnings press release.

PRESS RELEASE

Volvo Car Corporation records profits in 2010 - and the positive trend continues in Q1 2011

The full year result for 2010 shows an operating EBIT (earnings before interest and taxes) of 2,340 million SEK, an improvement of 7,525 million SEK compared to prior year. "I am very pleased to see that all of the dedication and efforts within the company is generating bottom line results. During 2010, we witnessed a turn-around in the car market and we have now returned to profitability", says Stefan Jacoby, President & CEO, Volvo Car Corporation.

The operating improvement of 7.5 billion SEK is explained primarily by higher volumes and favourable net pricing, partially offset by increased costs. 2010 revenue was 113 billion SEK, a 17.4 billion SEK increase from a year ago.
Retail sales increased by 11.6 percent to 373,525 units, compared to 334,808 units in 2009.
In China sales improved versus 2009 by 36.2 percent and in Nordic region by 29 percent. Europe grew by 10.4 percent and market share improved by 0.14 percentage points to 1.2 percent. In the US, volumes decreased by 12.2 percent to 53,952 units, compared to 61,246 in 2009.

Improved sales are mainly driven by an excellent product portfolio and strong market strategies:
• Successful launch of the all new S60 and V60
• Continued global success for the XC60 crossover, Volvo Car Corporation's best selling model
• Strong demand for Volvo Car Corporation's range of fuel efficient DRIVe vehicles in Europe

For the first quarter 2011, Volvo Car Corporation recorded an operating EBIT of 640 million SEK. This is an improvement of 280 million SEK compared with quarter 1 2010, explained primarily by improved sales, marketing efficiency and a controlled increase of costs. Cost development is explained by investments in marketing and engineering to support Volvo Car Corporation's expansion plans. Retail sales improved by 13.7 percent to 106,827 units.
Volume growth was recorded in all regions - Nordic improved by 22.9 percent, China by 10.5 percent, North America by 9.1 percent, Europe by 9.7 percent and Rest of World by 27.6 percent, compared to 2010. Market share increased in Nordic and in Europe by 1.09 percentage points and 0.09 percentage points respectively. For full year 2011, sales are forecasted to continue to grow. Volatility in exchange rates and an uncertain development of raw material prices may impact results. Production in both the Torslanda plant and Gent plant will be increased, and Volvo Car Corporation recently announced the need to recruit 1,200 new employees to support expansion plans, mainly within Research & Development.
In China, Volvo Car Corporation plans a new factory in Chengdu, a new Chinese head office with support functions in Shanghai, and a strengthened dealer structure.
[Source: Volvo | Images: Chris Paukert / AOL]