• Jul 7, 2010
2011 Volvo V60 – Click above for high-res image gallery

Volvo and Geely have taken another step toward holy matrimony. The European Union has officially approved the Chinese company's takeover of the Swedish manufacturer. The EU found that the move wouldn't stifle competition within its borders and gave all of the interested parties the green light. Ford originally agreed to sell Geely its former ward in March of this year, and the $1.8 billion dollar purchase is well on its way to becoming reality.

The move is a big one, not just for Volvo and Geely, but the whole of the Chinese auto market. According to Reuters, the buy is the largest overseas automotive acquisition any Chinese company has made to date. We would be surprised if it were the last, though.



[Source: Reuters]


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  • 15 Comments
      • 4 Years Ago
      Well, on the upside, there's a chance that the new owners won't be falling over themselves to force every wagon owner to buy an SUV if they want to stay with the brand.

      Who knows, maybe they'll bring the V60 AND V70. Now if everyone will excuse me, I need to get back to my crack pipe.
      • 4 Years Ago
      Hopefully Geely leaves Volvo alone(ok maybe fix the nose on the new models).
      • 4 Years Ago
      Well...

      They couldn't legitimately engineer safe vehicles.

      Lets hope they at least have the intelligence to incorporate what they can from Volvo.

      Tho Volvo kinda got matched in terms of safety by most other manufacturers so it's really in an image limbo. Not quite luxury, not quite volume, not quite sporty, safe and well built, but ... ehhh.
        • 4 Years Ago
        @ Tekdemon.

        Show me official Eurocap or NHTSA testing of a Chinese car and the official results and I will be impressed. Any manufacturer can make their car pass their own tests. Adjust the speed, adjust the angle or put high strength steel in to shore up a one off build. Don't believe everything you see on youtube.

        From what I have seen the Chinese do still need help when it comes to quality manufacturing practices and engineering. They can still learn quite a bit from Volvo. Volvo's testing facilities alone are absolutely mind blowing.
        • 4 Years Ago
        Really?
        http://www.youtube.com/watch?v=MkMyx1a-PcM
        http://www.youtube.com/watch?v=7LUaFmGoV9A
        Seems like they got the safety stuff down pretty well by themselves. Not Volvo good but they're not 10 years behind everyone anymore.
        Volvo is just gonna put them on top of the safety game.
      • 4 Years Ago
      So basically you want absolutely no competition from other countries, by banning all imports from low-wage factories? That will just make American products worse, not better, from lack of competition.
      • 4 Years Ago
      as long geely doesn't screw volvo over i'll be okay with this....
      • 4 Years Ago
      Well, it won't be long now before China is on par with the rest of the world for safety. That or Volvo is completely screwed.
      • 4 Years Ago
      I'm of the opinion that this is NOT a good thing.

      We can't compete with Chinese cars, Japanese or Koreans can't even.. hopefully we will not allow them to flood our market.. if so, say goodbye to another part of our shrinking manufacturing base :/
        • 4 Years Ago
        Competition will just drive us to even greater heights. Enough with the doom and gloom mentality where the whole world has to stand still just so we don't have to compete. Sure we'd have all the manufacturing jobs and the UAW would probably have gotten their contracts to pay like $200 an hour by now. But would that make for a better automotive world, or a better world in general? Heck no.
        The Chinese definitely don't have this crappy pessimistic mentality and it definitely doesn't help us to constantly whine about how we're doomed if other people actually try to build decent cars.
        I mean without competition GM would have us driving last-generation Cavaliers *shudder*
        • 4 Years Ago
        Maybe there will be competition when the day comes that we OK basically slave laboring our citizens and dumping toxic waste in our land instead of China and Africa.

        There is no competition - it is becoming extremely difficult to find and purchase domestic goods. Only the high end stuff is made here.
        • 4 Years Ago
        I believe you meant to say that the unrestricted ability of individual companies to offshore screwed us over. A tragedy of the commons one would say? I think you mean to say that "Uncle sam and EU 'Screwed' people over by allowing the free market to reign".
        • 4 Years Ago
        @Middle Way:

        I think BP has already fulfilled one of your dreaded scenarios.

        On a serious note though, I think people are going about the economic situation all wrong. You say that America simply cannot compete with Emerging Market on labor then you are right because Emerging Markets have a comparative advantage of a larger work force.

        You say America can't compete because wages are too low in Emerging Market but that's simple economics since labor force is large people naturally get paid less (of course it also has to do with the type of work done since most of the work is lower on the value chain) and America has a relatively smaller work force so people get paid more (but also because have more training and education).

        If Emerging Markets have a comparative advantage in labor then you really can't do anything about it except combat it by decreasing the comparative advantage by making people more efficient and more productive. By making people more efficient and more productive it is effectively increasing the size of the work force (total output) and this can match the deficit in labor. But since this requires research and investment it will cost lots of money and training and if it were easy it would have been implemented already.

        The more effective solution (in my opinion) is to focus less on the comparative advantages Emerging Markets has and focus on the comparative advantages America has. America has wonderful research and development culture in Silicon Valley and financial might in Wall Street (although the Economic Crisis has hampered faith in this sector) and these are the comparative advantages that cannot be matched by emerging markets so instead of trying to match the labor advantages of Emerging Markets use these to move forward but people don't want to go into these sectors because they have to get advanced educations and rather opt for a comparatively easier job in manufacturing.

        Thinking it in other words, Emerging Markets have Human Capital (in the form of a large labor force) and this is effectively traded on the global market kind of like a commodity such as oil. Because America buys this Human Capital when it buys goods produced in another country but what does the other countries buy from America. If you are trying to match the comparative advantages in the other countries you can't because why would the other countries buy Human Capital from America when they are plenty. It doesn't make sense to try to compete in manufacturing (although some very high tech manufacturing such as airplane is still done only in America).

        America is rich is Intellectual Capital (in the form of education, research and development, financial products) and America should use this comparative advantage in the global market. America should sell this capital to countries that don't have it because they don't have the means to produce it or produce it enough.

        My whole argument (although some might fiercely disagree) is saying that you shouldn't swim against the current because it a losing battle but rather find another path that is to your advantage.
      • 4 Years Ago
      Hopefully they won't try to retain the look while cheapening the metallurgy. Put another way, I hope they won't do a "melamine" on Volvo to turn extra profit, but that's only if they've finally learned their lesson, and no one knows the answer to that one.
      • 4 Years Ago
      Surprisingly, this may be a marriage made in heaven.
      The Swedes have the engineering and quality knowledge to teach Geely, and I would guess that the Geely folks really want that.
      That's what the merger with Ford was supposed to be but didn't work out.
      The S60 and V60 - wow. That is a truly beautiful car.
      I wish them all well.
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