{"id":492909,"date":"2010-03-31T10:07:45","date_gmt":"2010-03-31T14:07:45","guid":{"rendered":"http:\/\/blog.caranddriver.com\/?p=17910"},"modified":"2010-03-31T10:07:45","modified_gmt":"2010-03-31T14:07:45","slug":"volvo-a-win-win-for-geely","status":"publish","type":"post","link":"https:\/\/mereja.media\/index\/492909","title":{"rendered":"Volvo: A Win-Win for Geely"},"content":{"rendered":"

\"Volvo<\/a>Back in 1999, Ford paid $6.5 billion for Volvo at the height of its luxury-brand spending binge. (It also bought Jaguar, Land Rover, and Aston Martin.) Just over ten years later, it took $1.8 billion, or less than a third of that, for Chinese automaker Geely to acquire the Swedish automaker.<\/p>\n

While the infusion of cash probably looks very good to Ford, which has a mountain of debt to service, I think that Geely got a very good deal with this, and here’s why. First, the Chinese automaker gets access to a lot of\u00a0quality technology and, particularly, to Volvo’s safety expertise. The Swedish company has been at the forefront of automobile safety for the past\u00a050 years and it would take a fortune to gain that knowledge. We wouldn’t say that Volvo makes cars that we swoon over, but they are a ways ahead of the best that the Chinese can offer and, we venture, somewhat better in a collision.<\/p>\n

Second, should Geely ever decide to build its own cars in Europe, it gives the company a manufacturing base. Volvo built about 333,000 cars in 2009, down from its peak of more than half a million. So there’s some spare capacity sitting around in Sweden and Belgium, where Volvo has its factories.<\/p>\n

<\/span><\/p>\n

And finally, perhaps most important, Geely has bought an established luxury brand. In developing markets such as India and China, old-name European luxury brands have real cachet because there’s little or no indigenous high-end luxury industry. If you want to show you have made it, sitting in the back seat of a chauffeur-driven\u00a0Mercedes while outfitted in Chanel and toting a Louis Vuitton bag makes that statement.\u00a0Geely has already said that it plans to double Volvo’s annual production by making another 300,000 vehicles in China. It can charge a lot more for those cars than it can for ones with a Geely badge on the hood.<\/p>\n

That volume sounds a bit ambitious, but as an Chinese automaker, Geely (and thus Volvo) has access to government contracts. A few top politicians driving around the streets of Beijing in Volvos would do wonders for the brand.<\/p>\n

Related posts:<\/p>\n

    \n
  1. Geely Buys Volvo for $1.8 Billion<\/a><\/li>\n
  2. Ford and Geely Settle on Terms of Volvo Sale<\/a><\/li>\n
  3. Ford Chooses Chinese Automaker Geely as Preferred Bidder for Volvo<\/a><\/li>\n<\/ol>\n","protected":false},"excerpt":{"rendered":"

    Back in 1999, Ford paid $6.5 billion for Volvo at the height of its luxury-brand spending binge. (It also bought Jaguar, Land Rover, and Aston Martin.) Just over ten years later, it took $1.8 billion, or less than a third of that, for Chinese automaker Geely to acquire the Swedish automaker. While the infusion of […]<\/p>\n","protected":false},"author":6417,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[16,7],"tags":[],"class_list":["post-492909","post","type-post","status-publish","format-standard","hentry","category-mobile","category-news"],"_links":{"self":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/492909","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/users\/6417"}],"replies":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/comments?post=492909"}],"version-history":[{"count":0,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/492909\/revisions"}],"wp:attachment":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/media?parent=492909"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/categories?post=492909"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/tags?post=492909"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}