Volvo and parent company Geely will investigate merging into a single company in order to become more competitive in the global car market.
The Swedish car maker has been owned by Chinese giant Geely Holding since 2010 but remains a separate firm from Geely Automobile Holdings, which owns brands including Lotus, Lynk&Co, Proton and LEVC. Volvo's new spin-off brand Polestar is jointly owned by the two.
The proposed deal would merge Volvo and Geely Autmobile Holdings. The firms say the deal would "accelerate financial and technical synergies", with the "scale, knowledge and resources to be a leader in the ongoing transformation of the automotive industry". It added that any deal would "preserve the distinct identity" of Volvo, Geely, Lynk&Co and Polestar.
The two companies have established a joint working group headed by Volvo boss Hakan Samuelsson that will develop a proposal to send to each board. A Volvo spokesperson said the aim was to finalise the creation of the new group by the end of the year.
Geely chairman Li Shufu said the deal would “strengthen the synergies within the group while maintaining the competitive advantage and the integrity of each individual brand”.
Volvo and Geely already benefit from considerable shared technology, including the CMA and SPA platforms, and are in the process of merging their combustion engine divisions into a single firm. A spokesperson added the deal would allow the firm to "invest in new technologies such as electrification, connectivity and self driving technology."
Since Geely bought then-struggling Volvo from Ford, the brand has been revitalised and achieved record sales, largely thanks to the expansion of its SUV range. In recent years, Volvo has made several bold moves under boss Håkan Samuelsson, including setting the goal of becoming a maker of electric cars only within 20 years.
By merging, both Volvo and Geely could benefit from greater joint technical development and shared production facilities, which could be vital for them to remain competitive against giants such as the Volkswagen Group and the newly merged PSA Group and Fiat Chrysler Automobiles. It could also give Volvo access to extra production capacity in Geely's China factories, while aiding Geely’s attempts to expand its brands into Europe.
The new company would initially be listed on the Hong Kong stock market, with the intention to subsequently list it in Sweden. It's not known how the leadership of a combined company would be formed.
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Geely's rise from obscurity to the top
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Merger
I will never contribute to state backed Chinese companies with a purchase. No doubt Volvo is a good car, (but I never rated a company car we had some time ago), but that is besides the point. China wants to rule the world and I will not help them get there, not with the lack of human rights and bullying of neighbours. Reminds me of a European country in the 1930s.
[quote=john386]
I will never contribute to state backed Chinese companies with a purchase. No doubt Volvo is a good car, (but I never rated a company car we had some time ago), but that is besides the point. China wants to rule the world and I will not help them get there, not with the lack of human rights and bullying of neighbours. Reminds me of a European country in the 1930s.
[/quote
Dont worry, coronavirus is going to be a much more potent export, whether you like it or not.
All new Volvo's imported from China after Brexit????
Surely this means that all Volvo's bound for the UK market will not be imported from mainland Europe & Sweden because of tariffs, but in the future from China! Just like when the UK buys more BMW SUV'S they are all imported from the USA. So one result of Brexit is the re-allignment of the supply change & less cars imported from the EU:
Possibly incorrect...
Before I ordered my X2, I queried with my local Volvo retailer who said last year that U.K.-bound XC60s will be imported from China.
Brexit !
Eh? What on earth has Brexit got to do with this story?
Whether we're in the EU or out of it, we import cars from the factories where they're built.
As an owner, you would think that Geely would
already enjoy financial and technical synergies. Is this just Geely's way of saying they want even tighter control?
Hughbl wrote:
I was thinking similar, surely they already have everything they need from Volvo as they own it, what benefit really comes from a merger over the current ownership? I don't really see what they are getting at regarding how it benefits them.