Autoblog

Geely announces $11 billion investment in Volvo

Dan Roth — Mon, 09 Apr 2012 10:00:00 EST

Filed under: China, Plants/Manufacturing, Volvo, Earnings/Financials, Geely

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.

Geely announces $11 billion investment in Volvo originally appeared on Autoblog on Mon, 09 Apr 2012 10:00:00 EST. Please see our terms for use of feeds.

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Volvo replaces Peter Horbury with ex-VW designer

Jonathon Ramsey — Tue, 13 Mar 2012 08:30:00 EST

Filed under: Hirings/Firings/Layoffs, Volvo, Design/Style

Volvo has chosen former Volkswagen designer Thomas Ingenlath to replace Peter Horbury as the head of the Swedish brand's design department, the latter having moved up the ladder to oversee design work at Volvo's corporate parent, Geely. Ingenlath was with the VW Group for 20 years and did stints with Audi, Skoda and Volkswagen, leading work on concepts and production cars like the VW Nils Concept, the Bluesport Roadster and first-generation Skoda Fabia and Superb.

After a couple of years trying to decide where it wanted to be - or at least, how it wanted to be described - on the luxury spectrum everyone seems to be on message now. Volvo will be looking for Ingenlath to continue its progress toward being a "top-tier luxury brand," in the words of CEO Stefan Jacoby, and "a truly luxury automotive brand" in the words of Geely CEO Li Shufu. Check out the official press release below for more details.

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Volvo replaces Peter Horbury with ex-VW designer originally appeared on Autoblog on Tue, 13 Mar 2012 08:30:00 EST. Please see our terms for use of feeds.

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Yes or No? Jacoby reportedly says Volvo isn't ready for a 7 Series rival

Chris Shunk — Mon, 01 Nov 2010 11:32:00 EST

Filed under: Volvo, Geely

Just days after Geely purchased Volvo from Ford, the Chinese automaker's chairman, Li Shufu, proclaimed that the Swedish automaker needed a 7 Series fighter. Shufu's idea makes a lot of sense, at least in the large car-loving China market, where Volvo leadership wants to push a lot more metal. But when Shufu stated that Volvo needed to go big, he admitted that he needed to sell the idea to the company's new board. According to Autocar there is at least one very important vote that doesn't like the idea - at least not yet.

New Volvo CEO Stefan Jacoby reportedly called the idea of a Volvo that can go toe to toe with a Mercedes-Benz S-Class "a step too early." The British site claims that Jacoby prefers to hold off on going further upscale until after Volvo reaches its goal of 800,000 sales per year within the next five years.

So who's right here? Shufu undoubtedly knows the China market very well, and he's thinking that the key to China's collective heart comes in the form of a sedan with a lot of rear leg room. Jacoby, on the other hand, is taking a more pragmatic approach; use the company's funds to spur overall growth and then look upmarket once the company reaches its volume goals. Add in the fact that Jacoby already experienced first-hand how tough it can be to bring a new large luxury vehicle to market (Volkswagen Phaeton, anyone?), and we can see why the new Volvo CEO is preferring to play it slow.

[Source: Autocar | Image: Bjorn Larsson Rosvall/AFP/Getty]

Yes or No? Jacoby reportedly says Volvo isn't ready for a 7 Series rival originally appeared on Autoblog on Mon, 01 Nov 2010 11:32:00 EST. Please see our terms for use of feeds.

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

Zach Bowman — Wed, 04 Aug 2010 13:31:00 EST

Filed under: Sedan, China, Volvo, Geely, Luxury

2011 Volvo S60 - Click above for high-res image gallery

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.

Gallery: 2011 Volvo S60

[Source: Financial Times - reg. req.]

Report: Volvo's new chairman wants 7-Series, S-Class rival originally appeared on Autoblog on Wed, 04 Aug 2010 13:31:00 EST. Please see our terms for use of feeds.

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The DetroitBureau.com on Autoblog with Paul Eisenstein

Paul Eisenstein — Tue, 27 Apr 2010 15:59:00 EST

Filed under: Hirings/Firings/Layoffs, GM, Celebrities

Where have all the mavericks gone?

When he hands in his office keys a few days from now, General Motors Vice Chairman Bob Lutz will begin an oft-delayed retirement that was originally set to begin shortly after the ill-fated "merger of equals" between Daimler and Chrysler.

His decision to rejoin the automotive workforce a few years later wasn't all that much of a surprise to those who knew the former Marine pilot and what quite literally could be called his driving ambition. That leads many to suspect we'll continue to hear from Lutz, even though he bluntly wonders, "Who would hire a senior executive who's nearly 80 years old?"

Finally, it seems, this old soldier really may fade away, taking on a book assignment and a board seat or two. And, in the process, Lutz's departure will bring with it a different sort of change in the auto industry, the departure of the last classic automotive maverick.

Pull out a pen and jot down the names of the best-known auto industry executives. Your list might include Billy Ford or Alan Mulally, Ed Whitacre or even Carlos Ghosn, if you're taking the global view. Despite their prominence, even their willingness to take risks, these aren't exactly the sort of mavericks and eccentrics the industry was long known for.

That goes for Sergio Marchionne, the head of both Fiat and Chrysler. True, he's not your typical gray-flannel executive - he buys his trademark black sweaters "by the dozen," he jokes - and is clearly playing a high-risk poker game in his effort to turn around a desperately ill American automaker. But in the end, if someone eventually writes the Harvard Business Review analysis of the Canadian-educated executive, he'll still turn out to be another by-the-books strategist.

Paul A. Eisenstein is Publisher of TheDetroitBureau.com, and a 30-year veteran of the automotive beat. His editorials bring his unique perspective and deep understanding of the auto world to Autoblog readers on a regular basis.

Continue reading The DetroitBureau.com on Autoblog with Paul Eisenstein

The DetroitBureau.com on Autoblog with Paul Eisenstein originally appeared on Autoblog on Tue, 27 Apr 2010 15:59:00 EST. Please see our terms for use of feeds.

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REPORT: Geely says it will continue to let Volvo be Volvo

Chris Shunk — Tue, 29 Dec 2009 07:57:00 EST

Filed under: Volvo, Geely

Prior to Ford Motor Company's statement that it had agreed in principal to sell Volvo to China's Geely, some former Volvo executives wrote a letter to Bill Ford voicing their collective concern with the deal. The former execs felt Geely didn't have the cash or products to keep Volvo competitive and there was also a sense that Geely would somehow change how Volvo was run.

Reuters reports that Volvo has nothing to worry about, at least according to the head cheese at Geely. Geely founder and chairman Li Shufu reportedly told the official Xinhua news agency "if the deal succeeds, nothing will change for Volvo, except the boss turns to Li Shufu," adding that Volvo and Geely will be "independently-managed brands." Besides showing that CEOs can be as good at referring to themselves in the third person as any pro athlete, Shufu also insisted that Volvo's production, research and development facilities, union agreements and dealer networks will all be left intact.

Reuters estimates that acquiring Volvo will cost Geely about $1.8 billion dollars, though Shufu adds that the complications over intellectual property were much more costly than the final price tag. The Geely chief added that Volvo could help the Chinese automaker move more upscale, including helping the company build what he calls an "energy-powered vehicle." We're guessing he's referring to electric vehicles.

Shufu making such a public statement is likely welcome news to the many workers at Volvo, but there will likely be at least some changes in store for the storied Swedish automaker. For example, Shufu mentioned that Geely could help Volvo lower production costs, which could mean that parts that are currently produced in Europe could instead be made in China where labor is considerably cheaper. Beyond that, who knows what future lies ahead of Volvo. Shufu may be saying all the right things now, but his actions over the next few years will show whether he means what he says.

[Source: Reuters]

REPORT: Geely says it will continue to let Volvo be Volvo originally appeared on Autoblog on Tue, 29 Dec 2009 07:57:00 EST. Please see our terms for use of feeds.

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Geely denies interest in Volvo and Saab, but you can still bet on who will buy the 'Born From Jets' brand

Chris Paukert — Fri, 15 May 2009 18:00:00 EST

Filed under: China, Saab, Volvo, Earnings/Financials, Rumormill

According to the Chinese auto newshounds over at Gasgoo, Geely has denied it has any interest in buying Volvo or Saab. The Swedish patients, being shopped by Ford Motor Company and General Motors, respectively, are still up for sale, however.

As the story goes, Geely chairman Li Shufu has been cited as remarking that too much money is being asked for the two marques. According to a press release detailed by Gasgoo, the automaker has stated that it "has not submitted, and has no plans to submit, any bids concerning the takeovers of 'Volvo' or 'Saab' as stated in recent press articles."

In related news, someone might want to tell the bookies at a certain UK gambling website, Ladbrokes, that they may want to adjust their odds. According to Autocar, the sports betting site that allows customers to wager on everything from darts to Italian volleyball even has a pool going for who will win the right to purchase Saab. Thanks to everyone for the tips.

[Sources: Gasgoo; Autocar | Image: Joe Raedle/Getty]

Geely denies interest in Volvo and Saab, but you can still bet on who will buy the 'Born From Jets' brand originally appeared on Autoblog on Fri, 15 May 2009 18:00:00 EST. Please see our terms for use of feeds.

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Geely goes back to the drawing board to design US-spec car

John Neff — Fri, 21 Jul 2006 08:03:00 EST

Filed under: China, Plants/Manufacturing

Li Shufu, the chairman of Geely Automobile, has decided to put on hold his plans to export a Chinese produced vehicle to the United States by 2008 that would start at $10,000. The reason? According to AutoWeek, it sounds like Shufu doesn't think his Chinese domestic cars can hack it in the U.S. on low cost alone. The move apparently prompted the removal of John Harmer, the former COO of Geely USA Inc., from his position, though Shufu has retained him as a consultant. Shufu's new plan is to contract assistance from outside sources to build a car specifically for the U.S. market, as well as to build a new plant to assemble them.

The old plan would have had Geely automobiles on U.S. soil in 2008 or 2009, but the brand's arrival is now unknown. What we'd like to know is the location of this proposed plant. As negative reception of a vehicle produced by a Chinese automaker in the U.S. is a big concern for Geely and its competitors hoping to enter this market, one would think that building those vehicles inside the U.S. would be a good PR move. Nanjing apparently thinks so.

[Source: AutoWeek]

Geely goes back to the drawing board to design US-spec car originally appeared on Autoblog on Fri, 21 Jul 2006 08:03:00 EST. Please see our terms for use of feeds.

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