First step towards the loss of independence of Volvo compared to its Chinese shareholder? Volvo Cars (private cars) and Geely will "merge their respective production of heat engines in an autonomous company," announced Monday, October 7 a statement from the manufacturer of Gothenburg. Admittedly, the calming statement explains that this will allow the Swedish firm "to refocus its activity on its 100% electric vehicles". It prevents. "For Geely, this new entity will provide technologically sophisticated and efficient engines as well as hybrid engines."
The shareholder can therefore easily draw on the mechanical know-how of Volvo, which remains the nerve of the war between manufacturers … And for many more years, since this activity includes hybrids. Volvo puts a lot on these gasoline-electric rechargeable vehicles, which already represent 35% of orders for "SUV" XC60 in France, 68% of those XC90. This structure will bring together "some 3,000 Volvo Cars employees and 5,000 Geely employees". The seat of this entity is not yet chosen. The concern is all the more acute in Sweden that the success of Volvo under the Chinese flag (since 2010) was due precisely to the great autonomy left by the billionaire Li Shufu to its flagship brand! No undesired interference, nor too close relations with Geely's brands, much more low-end!
The Scandinavian firm has the wind in its sails. It has thus passed 340,826 vehicles (+ 7.3%) in the world in the first six months of 2019. A historical score. The car manufacturer created in 1927 – now separate today from heavyweight manufacturer AB Volvo- had exceeded half a million annual sales in 2015, reaching 642,253 units in 2018. It should not be far from 700,000 this year.
Thanks to its investments, Volvo has multiplied new products. He renewed the XC60 SUV, XC90, launched the small XC40. It has also replaced its S90 sedans, its famous V60, V90, and is currently launching its first mid-size sedan S60 … in rechargeable hybrid version only. The XC40 will also be available at the end of the year in gasoline-electric rechargeable version (262 horses). And, in 2020, will arrive his first 100% electric model.
Li Shufu makes his car market in Europe
With his respectability gained from the excellent results of Volvo, which he encouraged creativity, the boss and founder of Geely makes his market in Europe, step by step. This son of poor rice farmers who became 10e fortune of China, according to Bloomberg, will take over 50% of the Smart brand in Daimler. The two groups announced at the end of March that they will develop and produce the next generation of micro-cars in electric form in China as part of a joint venture. And this, from 2022.
In 2017, Geely already took 9.6% of the capital of Daimler for more than 7 billion euros, becoming its largest shareholder! A nice catch, since Daimler is the number one of the high-end car with Mercedes, but also the world's largest manufacturer of trucks. The most secretive Li Shufu, who had started his career as a photographer and then sold refrigerated spare parts, also acquired At the end of 2017, a 8.2% interest (and 15% of the voting rights) in AB Volvo! Geely is the second largest voting rightsholder of AB Volvo, behind the Industrivarden fund. However, this independent Swedish group, which owns Renault Trucks (former Renault heavyweight subsidiary), is the world's second largest truck … behind Daimler. The threat is for the European industry, not only for Volvo Cars.