Volvo is poised to rapidly inflate its presence in China, and it believes the way forward is through an $11 billion spending plan. "We want to revive Volvo and give the brand its strength back," says Li Shufu, Chairman of Geely Automobile Holdings. Speaking with German magazine Wirtschafts Woche, Shufu disclosed that Geely will put up $11 billion for a new engine factory, increased research and development and technology upgrades. However, Volvo's Per-Ake Froberg tells Reuters that Volvo itself will be providing the funds through borrowing and other means.
No matter where the funding comes from, the investment is meant to aggressively drive the Volvo brand in the Chinese market, where the Swedish brand sold about 50,000 cars last year. Geely wants Volvo to account for 20 percent of the premium car market in just three years(!) with a target of 200,000 vehicles for 2014. It's all part of an ambitious plan to double Volvo sales over the next ten years, and for its stewardship, Geely will get a new premium brand for China that uses Volvo tech and engineering. In addition, the two brands will be combining their purchasing power to get better deals from suppliers and small engine and electric vehicle development will also be shared between Volvo and Geely.

As the last Swedish brand standing, it's heartening to see that Geely has designs on increasing Volvo's sales. Here's hoping the recently voracious appetite for cars in the Chinese market doesn't shortchange American buyers looking for Nordic iron.


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  • 31 Comments
      merlot066
      • 2 Years Ago
      Kinda makes the $1 Billion that Ford invested in Lincoln look like chump change, oh wait, it was. Seriously though, now that Saab is gone Volvo can take a big chunk of their loyal customers.
      Thomas G.
      • 2 Years Ago
      I owned a volvo s70 right before ford acquired them. I loved that car, but it was a pile of ****. They need to bring back the boxy look. The new s70 looks like a dodge stratus from the 90's. But those damn seats are the best in the buisiness even ow. Vovlvo knows how to pad someones ass...and I mean that in a good way. If they can get some better electonics under the hood and some more fuel efficient engines I'd consider it again. But please, don't make all your cars look like a dodge stratus....bring back the brick!
      kl
      • 2 Years Ago
      Having seen the momentum and the financial results of Volvo in the past 2 years, Id say they have a safe bet to invest that money. On the other hand I see a complete disaster for Ford since it is steered towards a One Ford strategy. Selling off Jag/LR and Volvo and Mazda means a few million cars less shared technology for Ford. In the long run I see a retreat from Europe, or at least a serious down sizing of market aspirations. Just as devastating, loss of PSA (Citroen/Peugeot) that did the most part of Fords diesel engine development. It looks still ok for Ford, given the lunch money they have taken for the former PAG members, but in the long run, Ford will pay dearly for the strategic mismanagement of the past 3-4 years...
      IBx27
      • 2 Years Ago
      Why is the Great Wall of China listed as one of the wonders of the world? Because it's the only thing made there that lasted more than three weeks!
        MigrantWorker
        • 2 Years Ago
        @IBx27
        Hopefully the Chinese Made computer you are typing your comments with will break in 3 weeks...
      Beloved
      • 2 Years Ago
      Unlike South Korea and Japan which do not make planes, China has a extremely advanced aerospace industry that makes e.g. JF-17, J-10B, J-20 war jets, KJ-200 and KJ-2000 AWACs, Y-9 military transports, ARJ-21 and C-919 commercial airliners, and has a capable space program including space stations and extra-terrestrial rovers. China's superb aerospace industry should enable its automotive industry to gain at a much faster pace than those of South Korea and Japan did.
        Beloved
        • 2 Years Ago
        @Beloved
        Furthermore, unlike South Korea and the US, China has a very capable locomotive industry that makes e.g. CRH-380A and the latest CRH-500 trains, which also helps with the automotive industry.
        soyuzproton
        • 2 Years Ago
        @Beloved
        Actually South Korea and Japan do make planes. Also Japan makes its own rockets and space probes. South Korea = KAI T-50 Golden Eagle http://en.wikipedia.org/wiki/KAI_T-50_Golden_Eagle Japan = Kawasaki T-4, Kawasaki C-2, Kawasaki P-1, Mitsubishi ATD-X, Mitsubishi MRJ, H-IIB (H2B), H-II Transfer Vehicle, Hayabusa http://en.wikipedia.org/wiki/Kawasaki_T-4 http://en.wikipedia.org/wiki/Kawasaki_C-2 http://en.wikipedia.org/wiki/Kawasaki_P-1 http://en.wikipedia.org/wiki/Mitsubishi_ATD-X http://en.wikipedia.org/wiki/Mitsubishi_MRJ http://en.wikipedia.org/wiki/H-IIB http://en.wikipedia.org/wiki/H-II_Transfer_Vehicle http://en.wikipedia.org/wiki/Hayabusa
          Beloved
          • 2 Years Ago
          @soyuzproton
          those are nothing compared to high tech planes like JF-17 Thunder which is the first operational plane that uses the new type of air intakes, J-10B, J-20, ARJ21, C919
      Vincent Teron
      • 2 Years Ago
      It's like watching a slow train wreck. Geely's going to destroy Volvo's hard-won image of safe, reliable transportation.
        Stew
        • 2 Years Ago
        @Vincent Teron
        I don't see how. Since the are buying Volvo, they get all the tech, patents, and most importantly the engineers that made the cars. So, unless all the Volvo employees get a brain hemorrhage, I don't see how the safety will go down. Or do you mean, because they are "Chinese"? Looks like racism is alive and well.
      cardiologymidwest
      • 2 Years Ago
      It is not "heartening" to see Chinese automakers increasing their sales and wealth. They will significantly diminish the American auto industry within decades.
        Beloved
        • 2 Years Ago
        @cardiologymidwest
        too late, F-35 is already an embarassment compared to JF-17 Thunder
          KaiserWilhelm
          • 2 Years Ago
          @Beloved
          Sticks and stone my break our bones, but JDAM's dropped from American Jets will ruin your day.
      fserrano85
      • 2 Years Ago
      Wow! 11 BILLION..... All on Volvo huh?..........brave.
      Hazdaz
      • 2 Years Ago
      "Geely wants Volvo to account for 20 percent of the premium car market in just three years" LOL So I see that the executives that predicted that the Fiat 500 would sell ~50k units in the US, are now working for Geely.
      CivicDXG
      • 2 Years Ago
      I'm glad to see that Volvo is in good hands. Unlike what unfortunately happened to Saab, I see Volvo having a long successful future.
      Randy915
      • 2 Years Ago
      Why does every Chinese-related article require racist debate and unwarranted vote-downs when someone posts pro-Chinese comments? The main topic is another company invested $11 million in Volvo, period.
      DJ
      • 2 Years Ago
      When Ford sold Volvo to Geely, I was worried that Geely was purchasing Volvo with the intent to raid it. I am happy to have been proven wrong in this.
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