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Volvo’s Transformation under Geely: No Smooth Ride in the US?
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Volvo’s Transformation under Geely:

No Smooth Ride in the US?
“[Volvo] They’ve come a long way from their lowest point when it was uncertain
whether the company would continue to exist.”1
– Jessica Caldwell, senior automotive analyst for Edmunds.com2,
in January 2016.

INTRODUCTION
In January 2016, soon after posting record unit sales, Volvo Car Corporation (Volvo), the
Swedish-run luxury car brand owned by Chinese multinational automotive company, Zhejiang
Geely Holding Group (Geely), announced that it was gearing up to become a major international
player. The company reported that for the year 2015, it had sold 503,127 cars. This was the highest
in its 89-year-old history and represented an increase of 8 percent compared to 2014.3 According
to Volvo, the sales data marked the end of the first stage of the company’s recovery which began
after it emerged from a loss-making period in 2013. Commenting on the sales, Håkan Samuelsson
(Samuelsson), chief executive, Volvo, said, “I am delighted to report that 2015 was a year of
record sales. Now, with a successful 2015 behind us, Volvo is about to enter the second phase of
its global transformation. Once completed, Volvo will have ceased being a minor automotive
player and taken its position as a truly global premium car company. More records will tumble in
coming years.”4
Geely was founded in 1986 by founder and entrepreneur, Li Shufu (Li), as a refrigerator parts
company. In 1997, the company entered the Chinese automobile industry. Geely under Li created a
market for affordable cars. Much of the company’s success was attributable to its selling inexpensive
sedans in China and other developing markets. But Li’s ambition of entering China’s luxury market
came true in 2010 when Geely acquired Volvo from American automaker, Ford Motor Company
(Ford). The US financial crisis5 forced Ford to sell the Volvo brand in a bid to focus on its core
business. The crisis among the US automakers coincided with the boom in China’s auto market.
Sensing this as an opportunity to enter the luxury car market in China, Geely decided to acquire
Volvo. Subsequently in 2010, the company acquired Volvo from Ford for US$ 1.8 billion.6
1
Mary Chapman and Bill Vlasic, “Volvo Makes Comeback with China Detour, South Carolina Plant,”
www.postandcourier.com, January 16, 2016.
2
Edmunds.com is an American online resource providing information related to automobiles.
3
“Volvo sees 2016 Growth after Second Straight Sales Record,” www.autonews.com, January 8, 2016.
4
“Volvo Cars Reports Record Sales of 503,127 in 2015,” www.automotiveworld.com, January 8, 2016.
5
The world economy faced a severe financial meltdown characterized by record losses reported by a
number of financial institutions due to sub-prime mortgage crisis in the US and crashing stock markets
globally, beginning 2008. The financial meltdown had an impact on the real economy with many
companies cutting jobs across sectors, leading to a rise in unemployment rates and a fall in consumer
spending. The crisis spread to other economies worldwide in 2008 and early 2009.
6
“China’s Geely buys Volvo for $1.8bn,” http://news.bbc.co.uk, March 29, 2010.
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The deal gave Geely access to Volvo’s internationally-recognized brand name, technical know-
how, and reputation, which was lacking at the company, while Volvo got access to the world’s
largest auto market – China – with Geely’s connections, expertise, and established sales network in
the Chinese auto market. Analysts felt that before Geely could realize the synergies from the deal,
it would have to undertake the Herculean task of turning around the loss-making Volvo. For the
financial year ended 2009, Volvo’s pre-tax losses stood at US$ 934 million.7 Hence, Li devised a
turnaround plan under which he planned to make Volvo profitable by expanding its sales in China
to nearly 1 million vehicles a year, setting up a low-cost manufacturing plant in China with an
annual capacity of 300,000 vehicles a year banking on China’s inexpensive labor and market
potential, and producing more cars out of Volvo’s existing European factories. In addition to this,
Geely’s Hong Kong listed unit, Geely Automobile Holdings Ltd., planned to add two or more
luxurious car brands in a bid to boost Volvo’s global sales.
Industry analysts raised doubts over Geely’s ability to turnaround the loss making Volvo as the
ailing brand had a very niche market. Moreover, they pointed out that Geely had had no experience
in selling luxury car brands and was known for manufacturing cheap cars with a short history,

questionable quality, and poor safety while Volvo had a long history of being recognized as a
premium luxury car brand in Europe and its association with quality and consumers’ safety.8 Some

critics also pointed out that several Chinese companies had a relatively poor record integrating
their foreign acquisitions and Geely could also face issues related to cross-cultural management.
Despite analysts’ concerns, Geely went ahead with the turnaround plan and in 2012 it announced a
five-year strategic plan to revive Volvo with an investment of US$ 11 billion for enhancing
technology upgrades, increasing research and development, and setting up a new engine factory.
Geely’s turnaround efforts for Volvo achieved success when the latter recorded a net profit of US$
149.7 million for the year 2013, attributable to growing sales in China and cost-cutting.9 While
Volvo was growing due to its sales in China, the economic slowdown that started in 2011 in China
had an impact on the sales of automakers in China. In a bid to offset this challenge, Volvo started
focusing on the US auto market. As part of its revival efforts in the US, Volvo aimed to launch
new products for the US market and planned to increase its marketing spend to raise awareness
about its brand in the US. Analysts pointed out that it was difficult for Volvo to crack the US auto
market as the brand neither had a strong marketing muscle nor a powerful brand image compared
to that of its rivals in the US. In addition to this, some critics stated that Volvo also had to deal
with the perception that it could not make good cars. However, Volvo remained optimistic about
its revival in the US. In September 2015, Volvo started constructing a new manufacturing plant in
South Carolina to sell 100,000 cars annually in the US auto market. With this new plant, Geely had
ambitious plans to launch Volvo cars in the US to challenge Germany’s luxury car makers BMW
AG and Mercedes-Benz.
Analysts felt that it would be difficult for Volvo to challenge luxury car makers in the US
considering the dominant position they enjoyed in the market. Moreover, they felt that Volvo
would have to tackle the challenge of convincing choosy American buyers to buy Volvo cars made
in association with Geely in China. Analysts suggested that Volvo would have to rebuild its brand
in the US through advertising to gain visibility among American consumers and ensure them that
their products were free from quality glitches. Some analysts also raised doubts over Volvo’s
ability to sell 100,000 cars annually since they felt that the new plant at South Carolina would be
able to produce those six-digit vehicles only after 2018.
7
Joann Muller, “Can Geely Unleash Volvo’s Inner Tiger?” www.forbes.com, March 28, 2010.
8
Mike Peng, “Global Business,” South-Western Cengage Learning, 2011.
9
Agence France-Presse, “Volvo Cars Returns to Profit on China Sales, Cost Cuts,”
www.industryweek.com, March 21, 2014.
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LI SHUFU AND GEELY
Li Shufu (Li) began his entrepreneurial journey in 1982 at the age of 19 when he bought a camera
with his high school graduation money and started a small-scale photography business. He later
started a photography studio where he also sold handmade camera accessories.
In 1986, Li founded the Zhejiang Geely Holding Group (Geely) (meaning ‘lucky’ in Mandarin) in
Hangzhou, the capital of Zhejiang province (Refer to Exhibit I for Geely’s milestones). He invested
his earnings from the photography business to start a refrigerator parts company. Initially, he
produced parts for other companies but eventually set up his own refrigerator company. Due to a
tightening in industrial regulations, Li had difficulty obtaining permits for continuing his business
and was eventually forced to close down his factory.
In 1993, Li saw a new opportunity while visiting a state-owned motorcycle factory. Soon after, Li
bought a small state-owned motorcycle company, thereby acquiring the technology essential for
producing his motorcycles.
In 1994, Li bought new machinery for his manufacturing plant and started producing motorcycles.

In 1996, Geely sold 200,000 units to emerge as the major motorcycle manufacturer in China.10 All

this while, his ambitions were to build a car. However, it was not the right time for him to plunge
into this business as China’s 1994 auto industry policy stated that no new passenger car
manufacturers would be approved in the near term. He made numerous appeals to the Ministry of
Machine Building, central office in People’s Republic of China but with no success. Li, however,
did not give up his ambitions. In 1997, he became aware of a prison-owned auto factory in
Deyang, Sichuan, which was on the verge of bankruptcy. The factory did not produce passenger
cars, but manufactured micro buses and small vans. However, it had something Li was in need of –
permission to manufacture vehicles. Li bought the company in a bid to possess the factory’s
official vehicle production certificate.
Li aimed to develop cars that the average middle-class Chinese consumer could afford. In 1997,
Geely officially launched its automobile manufacturing business for US$ 8 million. The company’s
mission was to produce affordable cars that were priced reasonably at around US$ 6000.11
Li’s dream was to develop a luxury car based on Mercedes-Benz. He soon realized that the cost of
producing such a sophisticated and complex vehicle was beyond the capability of his small
company. Li also failed to obtain permission from the Ministry of Machine Building to build
luxury cars. He then shifted his focus to developing economy cars.
After obtaining permission to build smaller cars and open a factory in his home town, Zhejiang,
Geely rolled out its first car, the Haiqing, in August 1998. In 1998, Geely Automobiles Holdings
Ltd., an investment holding company of Geely, was set up.
Over the years, Geely was quick to move up the ranks of China’s largest automakers as it offered
products at the bottom end of the scale where foreign joint ventures had little to offer, and in Tier 3
and Tier 4 cities where foreign joint ventures had no presence.
In 2001, China’s internal Trade Commission, the State Economic and Trade Commission (SETC),
approved some of the Geely models and listed them in the SETC automobile products catalogue.
This resulted in Geely Automobile becoming the first private enterprise to be approved as an
automobile manufacturer in China.
In 2002, Li invited Xu Gang (Xu), a former accountant from the Zhejiang Provincial Local Tax
Bureau, to join Geely as the president. Xu used his networks to build a framework for the company
for establishing contracts and building relationships with several banks at the provincial level.
Subsequently, Geely raised a loan of RMB 100 million.12
10
“Geely Logo, History Timeline and Latest Models,” www.globalcarsbrands.com, September 26, 2015.
11
Mike Peng, “Global Business,” South-Western Cengage Learning, 2011.
12
As of January 20, 2015, 1 RMB = US$ 0.15.
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In 2003, the company started exporting cars to overseas markets. The company’s cars tasted huge
success, especially in the markets of Asia and Europe due to their fuel efficiency, reliability, and
performance. Buoyed by its success in the Asian and European markets, Geely decided to sell its
products in the US.
In 2005, pursuing its goal of entering the US market, the company presented its all-new Geely LC at
the 61st Frankfurt Motor Show, becoming the first Chinese automobile manufacturer to participate in
the show. This was followed by another showing at the 2006 Detroit Auto Show in North America.
Geely was again the first Chinese automobile manufacturer to showcase itself at the Detroit Auto
Show. While the company intended to assert its presence and become a well-known brand in the US,
its lack of international experience led to an ordinary, lacklustre display of a small silver sedan,
which attracted criticism rather than admiration. The low-cost car was uncompetitive on several
fronts and failed to meet the developed world’s stringent safety and environmental regulations. Thus,
the company decided to focus on its sales in the European market.
Geely’s management realized that it had to do better and that focusing on low-cost cars would help
it to neither sustain itself in the long run – especially in the global automobile market – nor gain

the international presence that it desired. In 2007, Geely kicked off a huge transformation with the

stated mission, “Produce the safest, most environmentally friendly and most emerging saving cars.
And let Geely cars go all over the world.” The transformation initiatives were aimed at getting rid
of the company’s image of a car manufacturer developing cheap cars and helping it become a
technology-driven automaker.
In 2009, China’s auto sales surpassed that of the US with 13.6 million units being sold compared
to the 10.4 million units sold in the US auto market.13 This was attributable to many consumers in
China showing an interest in buying cars. Seeing the growing interest among consumers to buy
cars, Li did not want to settle for Geely being an average Chinese car company. He aimed to
acquire world-class technology and achieve the brand recognition of an established global player,
and to do this he felt that he had to acquire a premium automotive brand that would also enable
Geely to compete with Ford, Chrysler, and Toyota. He was aware that it would be difficult to
realize his dream as independent Chinese automakers were known to have problems in design,
operations, safety, quality, and branding. Hence, through Geely’s parent company, Zhejiang Geely
Holding Group, Li acquired Swedish automaker, Volvo Car Corporation (Volvo) from Ford Motor
Company (Ford) in 2010 (Refer to Exhibit II for Geely’s organization chart).
For the financial year (FY) ended 2014, Geely recorded a turnover of RMB 21.738 billion (Refer
to Exhibit III for Geely’s five-year financial summary).14
ABOUT VOLVO
The history of Volvo dates back to 1915 when its founders, Assar Gabrielsson (Gabrielsson) and
Gustaf Larson (Larson), incorporated the company as a subsidiary of the Swedish ball bearing
manufacturer, AB SKF. In 1924, Gabrielsson and Larson decided to manufacture a Swedish car
which could withstand the rigors of the rough roads and cold temperatures in Sweden. The
emphasis on durability was a feature of Volvo cars since its inception.
On April 14, 1927, Volvo Car Corporation, also known as Volvo Personvagnar AB (Volvo), was
established in Gothenburg, Sweden, as an automobile manufacturer.
In 1932, Volvo sold around 10,000 vehicles and the car sector was growing hugely. During this
time, Volvo began targeting a new demographic segment, aiming to make cheaper cars.
Subsequently, in 1936, the company launched the PV 51.
13
Gilles Guillaume, “China Car Sales Top U.S.,” www.reuters.com, January 11, 2010.
14
“New Geely Era Annual Report 2014,” www.geelyauto.com.hk, 2014.
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By 1957, the company had an annual production of 50,000 cars and in 1958, Volvo recorded a
turnover of more than SEK 1 billion.15,16
In 1973, P G Gyllenhammar, the then CEO and Chairman of Volvo, announced at a press
conference in New York that Volvo would become the first non-American car manufacturer to
build a car manufacturing plant in the US. Subsequently, a plant was set up but no cars were
manufactured –the downturn in the economy in the 1970s scuttled the company’s plans.
In 1999, Volvo was bought by Ford Motor Company for US$ 6.45 billion.17
Before Ford could turnaround the loss-making Volvo, the former started facing several problems
such as a recall of 300,000 cars due to engine overheating problems in 2001. To add to its woes,
the September 11, 2001, terrorist attacks in the US led to its suffering net losses of US$ 692
million.18 In early 2002, Ford closed down three of its North American assembly plants. The
company’s problems continued in 2006 when Ford as well as other American automakers such as
General Motors (GM) and Chrysler started facing increasing competition from foreign
manufacturers such as Honda, Nissan, and Toyota, besides having to increase spending on

healthcare and retiree benefits and union wages.

In September 2006, Ford brought in Alan Mullaly as CEO. Under his leadership, the company
achieved a turnaround and all its operations except for the North American one, became profitable
in 2007.
While Ford was struggling in the US, the global economic slowdown at the end of 2008 led to its
sales dropping in the US auto market. Subsequently, Ford, GM, and Chrysler requested the US
government for a US$ 34 billion bailout.19 During this time, Ford decided to sell off Volvo to
focus on its core business. In 2010, Geely acquired Volvo from Ford for US$ 1.8 billion.20
For the FY ended 2014, Volvo recorded net sales of SEK 282,948 million (Refer to Exhibit IV for
Volvo’s five-year financial summary).21
ACQUIRING VOLVO
Li had always had the ambition of entering the luxury car segment and he felt that acquiring Volvo
from Ford would help him fulfil this dream. During his research, he found out that Volvo had
never been a strategic brand for Ford. This was because Ford had been a mass-market company
and Volvo being a premium brand, had been out of the reach of many of the company’s target
consumers. In early 2002, Li started contacting Ford in a bid to convince them to consider his
intention of buying Volvo seriously. He wrote letters to senior management of Ford and networked
with them at auto shows but without any success.
In 2007, Li went to Ford’s headquarters at Detroit to visit the company’s Chief Financial Officer.
However, he was not warmly welcomed. Instead, Ford’s management expressed doubts over
Geely’s ability to raise capital. Moreover, they felt that Geely was a relatively unknown brand in
the West.
15
“Volvo History,” www.conceptcarz.com.
16
As of January 20, 2015, 1 SEK = US$ 0.12.
17
“Volvo Brand History,” www.autoevolution.com.
18
Michael Hitt, R. Duane Ireland, and Robert Hoskisson, “Strategic Management Cases: Competitiveness
and Globalization,” Cengage Learning, 2012.
19
John D. Stoll, Matthew Dolan, Jeffrey McCracken, and Josh Mitchell, “Big Three Seek $34 Billion Aid,”
www.wsj.com, December 3, 2008.
20
“Volvo Sold to Chinese Automaker for $1.8 billion,” http://money.cnn.com, March 28, 2010.
21
“The Volvo Group Annual Report 2014,” www3.volvo.com, 2014.
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While Ford did not show any interest in Li’s proposal, it had been trying to sell Volvo since late
2008 to focus its resources on managing its core Ford, Lincoln, and Mercury brands. To add to
Ford’s troubles, the global financial crisis that started in 2008 led to the company incurring huge
losses. The difficulties Ford was experiencing in the US market and the US$ 934 million losses
made by Volvo Cars in 2009 made the company even keener to sell Volvo.22 As a consequence,
the senior leadership at Ford became more receptive to Li’s proposition. Li wooed Volvo’s
leadership team by emphasizing the tremendous potential to be tapped in the Chinese auto market.
He also stated that while France, Germany, and the US had been major markets for Volvo, they
had become highly saturated and competitive. He also underscored the potential of selling Volvo
to China’s growing population of luxury consumers.
Even after achieving the Herculean task of convincing Ford to sell Volvo, Geely had other
challenges to combat. Since Volvo’s processes and equipment were hugely interwoven with those
of Ford, including its safety and in-car-entertainment equipment, there were several disagreements
between Ford and Geely over patents and intellectual property rights (IPR) with Ford threatening
to call off the deal. Volvo was also known to share engine platforms and parts with Ford brands.
Besides, it relied on Ford for hardware and electronic-architecture work. Thus, Ford decided to

license some of its technology to Geely for use in its operations. This was also a bid to help Geely

improve the quality of its cars.
Having dealt with the IPR issue, the Geely management had to convince Swedish and Chinese
stakeholders that the deal made sense and would not end up like other failed Chinese foreign
acquisitions. Li maintained that Volvo would be operated as a separate subsidiary managed by
Swedish personnel, and the Volvo China team – including its public relations and marketing staff –
would operate independently of Geely. After the acquisition, Geely promised to retain 16,000 local
employees of Volvo in Sweden.
Soon after convincing the stakeholders and employee unions of Volvo, in August 2010, Geely
acquired Volvo from Ford, paying US$ 1.8 billion for a 100 percent ownership stake and US$ 200
million for a credit note. This marked China’s biggest acquisition of a foreign car maker,
according to auto analysts.23 Commenting on the acquisition, Li said, “We’ve fulfilled our dream
of acquiring Volvo, but that’s not the end of our plan; it’s only the starting point. We’ve arrived at
the foot of a big hill ... We hope and believe Volvo Cars will climb to the top of the mountain.”24
After acquiring Volvo, Li became the chairman of the Volvo brand. Stefan Jacoby – the previous
head of Volkswagen’s operations in the US, was appointed as the new president and CEO of
Volvo Cars and a new board of directors was elected.
Geely’s acquisition of Volvo included agreements on intellectual property rights as well as
research and development and supply arrangements among Geely, Volvo, and Ford. Under the
agreement, Ford continued to supply power trains, stampings, and some vehicle components to
Volvo. It also provided engineering and technology support, and access to tooling for common
components.
The acquisition gave Geely access to Volvo’s technology to improve its own product line and
enhance its image in China’s auto market with Volvo’s high-end models, internationally-
recognized luxury car brand image, reputation, and technical know-how lacking in Geely and
would take a long time to build. Geely also inherited Volvo’s existing distribution channels and
rights to use a large part of Volvo’s intellectual property, including access to its fuel-saving
environmental and safety technology.
22
Sjoerd Beugelsdijk, Steven Brakman, Harry Garretsen, and Charles van Marrewijk, “International
Economics and Business: Nations and Firms in the Global Economy,” Cambridge University Press,
2013.
23
Fang Yan and Alison Leung, “China’s Geely Completes Volvo buy,” www.reuters.com, August 2, 2010.
24
“China’s Geely Completes Volvo buy,” http://ca.reuters.com, August 2, 2010.
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On the other hand, Geely provided Volvo the much needed capital as well as access to one of the
fastest growing markets in the world with its established sales network, expertise, and connections
in the market. The Geely acquisition was expected to provide Volvo the much needed scale across
its product portfolio. Volvo was also expected to benefit from China’s cheap manufacturing,
Geely’s knowledge of the Chinese automotive market, and channels of distribution. Geely also had
plans to sell Volvo cars manufactured in China in the US market, a move that would make it one
of the first Chinese companies to bring Chinese-made vehicles into the US. Going forward, Geely
aimed to use the Volvo brand to compete with BMW and Mercedes-Benz, and Audi in China’s
luxury car market.
Some analysts raised doubts over Geely’s ability to handle Volvo, however, Li believed that Geely
and Volvo would not face any cultural conflicts as both the managements were kept separate. John
Zeng (Zeng), analyst at IHS Automotive Inc.25 (IHS Automotive), also felt that Geely could be
better equipped for success given its past experience of successfully acquiring foreign companies
such as Australian gearbox maker, Drivetrain Systems International, and its tie-up with British cab
maker, Manganese Bronze Holdings Plc. According to Zeng, “Geely is not a beginner in global
M&A like many people think. In China, Geely has established itself as a mass-market car maker;

the acquisition of Volvo provides an opportunity to bring it to the next level.”26

Some analysts pointed out that a major challenge for Geely was related to Volvo’s brand
recognition and value. The Volvo brand was associated with high quality and safety for customers
worldwide, especially in Europe and North America. On the other hand, Geely had earned the
reputation of low price but low quality because it had entered the Chinese auto market by
producing low-cost vehicles. They opined that it would be difficult for Geely as owner to retain the
high value of the Volvo brand.
REVIVING VOLVO
Focusing on the Chinese Auto Market

To revive Volvo, Li planned to take advantage of the booming Chinese auto market and bring the
Swedish brand back to profitability. Zeng also believed that China was the crucial market for Li’s
effort to turnaround Volvo and offset its losses in Europe.
In 2011, Volvo announced a US$ 11 billion strategic plan from 2011 to 2015 to turn Volvo into a
global luxury brand, make China a major manufacturing market for it, and increase its sales from
373,000 vehicles in 2010 to 800,000 vehicles by 2020. Under the transformation plan, Volvo also
planned to develop new products, increase its R&D spend, and upgrade technology.27 In the new
Beijing factory, Li aimed to manufacture 300,000 Volvo branded cars a year.28
In 2012, Volvo and Geely signed a technology transfer agreement to form a joint venture as Volvo
was considered a foreign car maker and needed a local partner for manufacturing, despite being
wholly-owned by Geely. Under the agreement, while Geely planned to use Volvo’s technologies to
come out with new products, Volvo was expected to benefit from Geely’s strong presence in the
Chinese auto market and its experience with local system developers. The agreement aimed to
enhance Volvo’s cost-competitiveness, crucial to the brand’s sustainability. As part of the joint
venture, by 2014, both Volvo and Geely planned to set up two assembly plants – one in the north-
25
IHS Automotive Inc. provides data, forecasts, industry analysis, and consulting services to automotive
Original Equipment Manufacturers, financial firms, suppliers, and governments involved with the
automotive industry worldwide.
26
Fang Yan and Alison Leung, “China’s Geely Completes Volvo buy,” www.reuters.com, August 2, 2010.
27
“Volvo to Spend $11 Billion over Coming Years,” www.reuters.com, April 5, 2012.
28
Huang Yuntao and Jacqueline Wong, “Geely to Double Volvo Output with China Plant: Source,”
www.reuters.com, January 26, 2010.
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eastern city of Daqing and the other in the western Chinese city of Chengdu. Volvo planned to use
the plants in China to export its cars to the US, Russia, and other markets such as Southeast Asia. By
2015, Volvo had plans to begin exporting S60L model cars to the US and XC90 SUVs to Russia.
Bracing for the US Market
In September 2013, Geely announced that it was working with Volvo on product development
with the intention of exporting its cars to the US by 2016. Li had been harbouring aspirations of
entering the US auto market ever since Geely had participated in the Detroit Auto Show in 2006.
However, lack of consumer confidence and brand recognition forced Geely to shelve its plans to
have a presence in the US auto market. With the acquisition of Volvo, Li aimed to fulfil his dream
of foraying into the US market. According to Gui Shengyue (Gui), chief executive officer of
Geely, “Our acquisition of Volvo enhanced our image and overseas consumers are seeing us as an
international company. Our deliveries in U.S. and Europe will be banking on those jointly
developed models.”29 Gui added that Geely targeted to have around 60 percent of its sales coming
from overseas by 2018.30
However, industry observers pointed out that Geely could face an uphill task in making a mark in

the US auto market as Volvo’s sales and market share had been on a decline in the US. In 2012,

Volvo had a meagre share of 0.5 percent (Refer to Exhibit V for Volvo’s sales and market share in
the US). This was in contrast to Volvo’s presence in the 1990s when millions of consumers in the
US had chosen Volvo’s sedans and square station wagons over sleek luxury cars available during
that time in the US auto market. Admitting Volvo’s weak performance in the US, Alain Visser,
senior vice president for marketing, sales, and customer service at Volvo, said, “We’ve done a
relatively poor job trying to blend in. And now we’re saying, ‘We don’t want to blend in. We are
different.’ We have neglected the U.S. market for a period of 10 years. Now we are really saying,
‘That’s enough.”31
Analysts were quick to point out Volvo’s challenges in the US. In June 2013, Michelle Krebs
(Krebs), analyst at American online resource for automotive information, Edmunds.com, said that
Volvo was struggling through an identity crisis. Moreover, she felt that the company neither had a
strong media muscle nor new models to compete with automakers in the US. According to
Automotive News Data Center32, for the year 2012, Volvo’s sales in the US increased by 1 percent
to 68,117 vehicles, compared to 139,000 vehicles sold in 2004. Analysts believed that Volvo failed
to beat its innovative competitors on its core product proposition. Krebs added, “Volvo used to be
all about safety and long-term durability. But [now] everybody has safety. Many companies have
more safety features than Volvo does, so they can’t own that anymore. Same with durability. The
average car on the road today is over 10 years old -- which speaks volumes to the quality
improvements made by the industry. So what is their niche? It’s hard for them to compete in the
luxury world with Mercedes and BMW.”33
Some experts pointed out that Volvo also lagged behind in advertising compared to its competitors in
the US auto market. According to market research firm, Kantar Media, while Volvo spent around
US$ 55 million on advertising in 2012, Mercedes spent around US$ 250 million and BMW around
US$ 130 million during the same period. Despite several problems in the US, Volvo felt that things
could change for the company once it started pumping new products into the US auto market.
29
“Geely Targets U.S. Exports with Volvo-Developed Models in 2016,” www.bloomberg.com, August 25,
2016.
30
“Geely Targets U.S. Exports with Volvo-Developed Models in 2016,” www.bloomberg.com, August 25,
2016.
31
Kyle Stock, “Owned by the Chinese, Volvo Swears It’s More Swedish than Ever,” www.bloomberg.com,
June 26, 2014.
32
Automotive News Data Center is one of the leading sources of news about the global automobile industry.
33
Michael McCarthy, “Volvo Faces Identity Crisis in U.S.,” http://adage.com, June 18, 2013.
9
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In November 2013, Volvo rolled out a new strategy aimed at reviving the brand in the US auto
market. The company shared its plans with the US dealers of introducing new vehicles, leasing,
and fresh marketing (Refer to Box I for Volvo’s strategy to compete in the US auto market).
Samuelsson championed these changes as part of Volvo’s efforts to restore the brand’s Swedish
heritage while positioning Volvo as a ‘unique premium brand’ that could compete with Germany’s
luxury automakers in the US. The company had no plans to increase its dealer count beyond 308 as
of November 2013. According to Alain Visser, senior vice president of sales, marketing and
customer service, Volvo, “The volume of sales is too low for the level of professionalism for our
dealer network.”34
Box I
Volvo’s Strategy to Compete in the US Auto Market
 Social Media: Volvo officials planned to creatively use social media as part of its
advertising campaign as they felt that social media was a cost effective tool for a small
automaker like Volvo to reach a larger audience.

 Leasing: Tony Nicolosi (Nicolosi), chief at Volvo’s North American operations, stated that

the company would return to leasing. According to Nicolosi, the volume of leasing declined
to 10 percent of Volvo’s volume during the 2008 recession. He added, “We made a decision
to walk away from leasing, and that has hurt us. And it’s one reason why dealers are
unhappy. Leasing is the cornerstone of building a pipeline of return business.”35
 Powertrains: Volvo announced its plans to replace its entire powertrain lineup, according
to Lex Kerssemakers (Kerssemakers), senior vice president of product strategy and vehicle
line management, Volvo. The new Volvo-designed and built engines would comprise of
three-and four-cylinder diesel engines based on the architecture of gasoline engines, three-
and four-cylinder gasoline engines with and without turbochargers, and hybrids that use an
electric rear axle. According to Kerssemakers, the new engine lineup would help Volvo
simplify its production by using more common parts and manufacturing processes.
 Products: By 2014, Volvo had plans to launch its V60 sport wagons in the US followed by
its XC90.
 Future technologies: The engineers at Volvo were making efforts to build autonomous cars
as they felt that self-driving vehicles could greatly enhance safety. In addition to this, other
technology Volvo was focusing on was to include plug-in hybrids and advanced
connectivity.
Adapted from Richard Truett, “Volvo Outlines Strategy for U.S. Revival,” www.autonews.com, November 6,
2013.
In 2014, as part of its revival efforts, Volvo hired American management consulting firm,
McKinsey & Company (McKinsey). McKinsey published an internal report showing the
magnitude of the challenge faced by Volvo. The report revealed that awareness about the brand
was severely damaged due to its modest advertising, and that this had led to an underutilized
dealer network. According to the McKinsey study, while premium automakers in the US had a
marketing budget of US$ 228 million, Volvo’s marketing budget stood at US$ 76 million. In 2013,
Volvo had the third largest dealer network in the US. However, it sold only 171 cars per dealer
while Lexus sold 1,175 cars per dealer and BMW sold 915 cars per dealer (Refer to Table I for
number of dealers and vehicles sold in 2013). As a result, Volvo dealers were becoming less
profitable whereas the margins of the other luxury car makers had doubled.36
34
Richard Truett, “Volvo Outlines Strategy for U.S. Revival,” www.autonews.com, November 6, 2013.
35
Richard Truett, “Volvo Outlines Strategy for U.S. Revival,” www.autonews.com, November 6, 2013.
36
John D Stoll and Sven Grundberg, “Volvo Needs to Gain U.S. Market Share, CEO Says,” www.wsj.com,
November 19, 2014.
10
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Table I:
Number of Dealers and Vehicles Sold in the US (2013)
Number of Vehicles Vehicles Sold per
Company Number of Dealers
Sold Dealer
Mercedes-Benz 361 335 929
BMW 338 309 915
Volvo 305 52 171
Audi 280 159 569
Acura 275 166 602
Lexus 234 275 1,175
Infiniti 205 119 579
Adapted from John D Stoll and Sven Grundberg, “Volvo Needs to Gain U.S. Market Share, CEO Says,”

www.wsj.com, November 19, 2014.

Volvo also had to deal with the perception of American consumers who felt that the company
could not make good cars. It was observed that competitors in the lucrative US auto market
outshined their rivals by aggressively marketing their products to the American consumers where
Volvo was lagging far behind. Thus Volvo also had to tackle the challenge of poor marketing and
low brand cachet.
THE RESULTS
Volvo’s road to recovery was far from smooth. In 2013, it reported that for the year 2012 it had
recorded a drop of 6 percent in vehicle sales due to intense competition in the auto industry.
Analysts pointed out that Volvo had struggled to gain momentum for a revamp aimed at targeting
customers in the hugely competitive Chinese auto market and keeping up with bigger competitors.
The company’s sales in China in 2012 declined by 11 percent to 41,989 cars from 2011 (Refer to
Table II for luxury car vehicle sales in China). The decline was attributable to the fierce
competition in the imported luxury segment and due to termination of the S40 model. Commenting
on Volvo’s performance in China, Martin Skold (Skold), a researcher focusing on the auto industry
at the Stockholm School of Economics, said, “Volvo also hasn’t been able to position itself on the
Chinese market in the same way as, for example, the German auto manufacturers, which have been
there longer and have better brand recognition.”37
Table II:
Luxury Car Vehicle Sales in China (2012)
Automaker Sales (units)
Audi 405,838
BMW 326,444
Mercedes-Benz 196,211
Volvo 41,989
Jaguar Land Rover 73,347
Adapted from Li Fangfang, “Volvo Sales Drop Defies Surging Luxury Sector,” www.chinadaily.com,
January 18, 2013.
37
Anna Molin, “Volvo Car’s 2012 Sales Drop 6%,” www.wsj.com, January 7, 2013.
11
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To ramp up its sales, in the second half of 2013, Volvo planned to renew its model range, open a
new manufacturing plant in Chengdu, and step up its US$ 11 billion investment plan that included
setting up new factories and overhauling its engine family and vehicle platform, and improve its
marketing efforts. To make this push, Volvo planned to borrow US$ 1.2 billion from the China
Development Bank.38 Commenting on this move, Skold said Volvo would intensify its marketing
initiatives in China to bolster its brand and convince lenders that it had the ability to compete with
international rivals such as BMW and Audi.
In 2013, Volvo’s revival achieved success with the company recording net profits of US$ 149.7
million with sales of 427,840 new vehicles. Commenting on the sales, Samuelsson said, “This
strong turnaround from the first half of 2013 is further tangible proof of Volvo Car Group’s
progress in implementing its transformation plan. This full-year profit represents a significant
turnaround compared to the result for the first six months of 2013.”39 He added, “We are
delivering on the plan we set out four years ago: focus on profitability, revitalise the brand,
reinforce our product strengths and leverage our potential and position in China. 2013 was a year
of groundwork, successfully preparing the way for the future. This year our total sales are forecast
to increase and we will – with the XC90 – reveal the first product of a portfolio that will delight

our customers, paving the way for the company’s future growth.”40

TAPPING CHINA’S LUXURY CAR MARKET
In August 2014, Volvo unveiled its first car under Geely’s ownership – the XC90. Commenting on
the launch, Bin Zhu, China forecast-team manager at consultancy, LMC Automotive, said, “If
Volvo is successful, it will have a great significance on Chinese automakers. It could boost their
confidence and set an example for the whole industry.” 41 It was observed that more number of cars
were produced and sold in China but the domestic brands in the country had failed to make an
impact in international markets. Even in China, most of the consumers drove cars made by foreign
automakers rather than ones produced by domestic car makers.
In 2014, around 75 percent of the premium car segment in China was dominated by Mercedes,
Audi, and BMW. With the launch of the XC90, Volvo planned to challenge the German premium
car makers. According to James Chao, director of the IHS consultancy’s automotive unit, “It’s a
car that hits right in the heart of the market. It’s a little larger SUV, premium but not fully luxury.
It’s retained a lot of Volvo’s European flair, while many people surely would feel proud to drive a
Chinese vehicle of this caliber. If it’s priced competitively and realistically, it could be a hit.” 42
Industry experts opined that there was tremendous potential to be tapped in China’s premium car
market as it was poised to become the largest premium car market in the world by 2020, selling 3
million vehicles while the US would sell 2.3 million vehicles, according to McKinsey.43
LOOKING AHEAD
While Volvo was reviving its operations and planning to make a mark in the US market, the
slowdown of the Chinese economy added to its troubles. However, defying the slowdown, Volvo
boosted its earnings goal for 2015 stating that the sales in the European market would outweigh the
38
Anna Molin, “Volvo Car’s 2012 Sales Drop 6%,” www.wsj.com, January 7, 2013.
39
Chris Wright, “Sweden: Geely’s Volvo Car on Track – CEO,” www.just-auto.com, March 24, 2014.
40
Chris Wright, “Sweden: Geely’s Volvo Car on Track – CEO,” www.just-auto.com, March 24, 2014.
41
Per Liljas, “Volvo is Banking on this Car to Crack the Top End of the World’s Biggest Auto Market,”
http://time.com, August 26, 2014.
42
Per Liljas, “Volvo is Banking on this Car to Crack the Top End of the World’s Biggest Auto Market,”
http://time.com, August 26, 2014.
43
Kenneth Rapoza, “The Future of China’s Luxury Auto Market,” www.forbes.com, April 1, 2013.
12
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slowdown in China. According to Samuelsson, “The price situation in China is getting tougher.
The important thing is to see the strength of having Volvo global. We can balance out softer
development in China.”44
Volvo believed that the company’s roll out of the XC90 in late-2015 and the S90 sedan in 2016
would drive sales in China despite a slowdown in the economy. The S90 sedan featured semi
autonomous driving, in addition to providing the utmost comfort and luxury. Commenting on
Volvo’s ambitions, Stuart Pearson, analyst, Exane-BNP Paribas, said, “I think you will still see
them grow volumes there significantly, but just at a lower price point. There are still healthy
margins on offer in China, especially relative to what Volvo has been making.”45
Volvo tasted signs of success through its focus on the US market when, in January 2016, the
company reported that its sales in the US had increased by 24 percent to 70,000 vehicles in 2015
while the overall industry sales had grown by just 6 percent, according to the research firm
Autodata.46 Commenting on Volvo’s revival in the US market, Jessica Caldwell, senior automotive
analyst for Edmunds.com, said, “The turnaround is pretty remarkable. New designs and features
are coming together to create more interest in the brand.”47

Volvo had ambitious plans to sell 800,000 cars globally by 2020. It also aimed to embrace its

reputation for producing safe vehicles and announced its goal of having no crash fatalities or
serious injuries in a new Volvo by 2020.
In September 2015, Volvo started constructing its US$ 500 million manufacturing plant in South
Carolina for manufacturing 100,000 cars a year in the US.48 Some industry analysts felt that Volvo
would be able to fulfil its ambition since the US auto market was expected to grow with sales of 17
million vehicles by 2022. On the other hand, some critics felt that selling 100,000 cars annually in
the US would be a challenge as Volvo’s new plant in South Carolina would not have the capacity to
produce so many vehicles until 2018. Some analysts also raised doubts over Volvo’s success in the
US auto market as American buyers were known to be choosy about brands. Some analysts,
however, felt that cars made in China could crack the US auto market provided there were no
quality issues.
Volvo also had plans to challenge Mercedes and BMW in the US luxury car market. To realize this
challenge, analysts felt that Volvo had to balance growing sales with a boost in profitability as its
operating margin in the first half of 2015 was 2.2 percent, nearly four times that of its German
rivals. According to Patrik Strom, associate professor at the University of Gothenburg, “If one lays
claim to being a premium manufacturer, they need to boost that profit margin. Look at BMW, that
in the 1980s was roughly the size of Volvo but which has expanded hugely since then.”49 Experts
felt that it would be difficult for Volvo to challenge BMW and Mercedes in the US auto market as
for the year 2015, BMW recorded sales of 346,023 vehicles in the luxury cars segment while
Volvo sold only 70,047 vehicles (Refer to Table III for luxury car sales in the US).
However, Samuelsson stated that he expected Volvo’s profitability to reach that of BMW and
Mercedes in the medium term as the company was gearing up to launch nine new models by 2020.
He added, “Volvo has all the capabilities and potential to become a leader.” 50
44
Naomi Kresge, “Volvo Cars Boosts Profit Goal as Europe Sales Outweigh China,”
wwww.bloomberg.com, August 19, 2015.
45
“Geely’s Volvo Sees New Models Taking edge off China Slowdown,” www.reuters.com, September 10, 2015.
46
Mary M Chapman and Bill Vlasic, “Volvo Makes a Comeback, with a Detour through China,”
www.nytimes.com, January 12, 2016.
47
Mary M Chapman and Bill Vlasic, “Volvo Makes a Comeback, with a Detour through China,”
www.nytimes.com, January 12, 2016.
48
“Volvo Car Sales Top Half a Million for First Time,” www.marketwatch.com, January 8, 2016.
49
“Geely’s Volvo Sees New Models Taking edge off China Slowdown,” www.reuters.com, September 10, 2015.
50
“Li Shufu: My Dream is for People all over the World to be Driving a Geely,” www.thescottishsun.co.uk.
13
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Table III:
Luxury Car Sales in the US (2015)
Company Sales (in units)
BMW 346,023
Lexus 344,601
Mercedes-Benz 343,088
Audi 202,202
Acura 177,165
Cadillac 175,267
Infiniti 133,498
Lincoln 101,227
Land Rover 70,582

Volvo 70,047

Porsche 51,756
Jaguar 14,466
Maserati 11,697
Bentley 2,686
Rolls-Royce 1,140
Source: Viknesh Vijayenthiran, “BMW Holds on to U.S. Luxury Car Sales Crown in 2015, Lexus Moves into
Second,” www.motorauthority.com, January 6, 2016.
14
Exhibit I:
Geely’s Milestones
Source: “Geely History,” www.geely.com.

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15
Exhibit II: Geely’s Organization Chart
Source: “Geely Annual Report 2011,” www.geelyauto.com.hk, 2011.

316-0253-1
16
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Exhibit III:
Geely’s Five-Year Financial Summary
In RMB
2014 2013 2012 2011 2010
Billion
Turnover 21.738,358 28.707,571 24.627,913 20.964,931 20.099,388
Profit before
1.943,405 3.304,182 2.529,077 2.183,208 1.900,323
taxation
Taxation (0.494,177) (0.623,934) (0.479,291) (0.467,359) (0.350,612)
Profit for the
1.449,128 2.680,248 2.049,786 1.715,849 1.549,711
year
Attributable

to:

Equity
holders of the 1.430,588 2.663,136 2.039,969 1.543,437 1.368,437
Company
Non-
controlling 0.0,118,54 0.0,117,112 0.009,817 0.172,412 0.181,274
interests
1.449,128 2.680,248 2.049,786 1.715,849 1.549,711
Assets and
liabilities
Total assets 37.280,150 33.599,308 31.379,826 27.596,758 23.974,343
Total
(19.8,138) (17.369,617) (18.175,802) (17.446,643) (14.896,666)
liabilities
Total equity 17.46,635 16.229,691 13.204,024 10.150,115 9.077,677
Represented
by:
Equity
attributable to
equity 17.287,996 16.068,024 12.886,657 9.5,822 8.021,882
holders of the
Company
Non-
controlling 0.178,354 0.161,667 0.317,367 0.567,915 1.055,795
interests
17.466,35 16.229,691 13.204,024 10.150,115 9.077,677
Source: “New Geely Era Annual Report 2014,” www.geelyauto.com.hk, 2014.
17
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Exhibit IV:
Volvo’s Five-Year Financial Summary
SEK Million 2014 2013 2012 2011 2010
Net sales 282,948 272,622 303,647 310,367 264,749
Cost of sales (220,012) (212,504) (235,085) (235,104) (201,797)
Gross income 62,937 60,118 68,562 75,263 62,952
Research and
development (16,656) (15,124) (14,794) (13,276) (12,970)
expenses
Selling expenses (27,448) (28,506) (28,248) (26,001) (24,149)
Administrative
(5,408) (5,862) (5,669) (7,132) (5,666)
expenses

Other operating
(7,697) (3,554) (2,160) (1,649) (2,023)
income and expenses
Income from
investments in joint 46 96 (23) (81) (86)
ventures
Income from other

50 (30) (47) (225) (58)
investments
Operating income 5,824 7,138 17,622 26,899 18,000
Interest income and
328 381 510 608 442
similar credits
Interest expenses and
(1,994) (2,810) (2,476) (2,875) (3,142)
similar charges
Other financial
931 11 (301) 297 213
income and expenses
Income after
5,089 4,721 15,355 24,929 15,514
financial items
Income taxes (2,854) (919) (4,097) (6,814) (4,302)
Income for the
2,235 3,802 11,258 18,115 11,212
period
Attributable to:
Equity holders of the
2,099 3,583 11,039 17,751 10,866
Parent Company
Minority Interest 136 219 219 364 346
2,235 3,802 11,258 18,115 11,212
Source: “The Volvo Group Annual Report 2014,” www3.volvo.com, 2014.
18
Aspirations,” www.nada.com, September 11, 2013.
19
Exhibit V:
Volvo’s Sales and Market Share in the US
Source: Joseph Choi, “Geely Prepares for Entry into U.S. Market; Other Automakers Hold Same
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Suggested Readings and References:
1. Mary Chapman and Bill Vlasic, “Volvo Makes Comeback with China Detour, South
Carolina Plant,” www.postandcourier.com, January 16, 2016.
2. “Volvo Cars Reports Record Sales of 503,127 in 2015,” www.automotiveworld.com,
January 8, 2016.
3. “Volvo sees 2016 Growth after Second Straight Sales Record,” www.autonews.com,
January 8, 2016.
4. Angelo Young, “Volvo’s S90 is an Important Test of the Carmaker’s $11 Billion
Reinvention,” www.ibtimes.com, December 7, 2015.
5. “China Aims for 30 Million Annual Auto production Capacity by 2020: Industry
Association,” www.reuters.com, October 16, 2015.
6. “Geely Logo, History Timeline and Latest Models,” www.globalcarsbrands.com,
September 26, 2015.

7. “Geely’s Volvo Sees New Models Taking edge off China Slowdown,”
www.reuters.com, September 10, 2015.
8. “Geely Targets U.S. Exports with Volvo-Developed Models in 2016,”
www.bloomberg.com, August 25, 2015.
9. Naomi Kresge, “Volvo Cars Boosts Profit Goal as Europe Sales Outweigh China,”
wwww.bloomberg.com, August 19, 2015.

10. Dale Buss, “Volvo Must Solve U.S. Sales Challenge before Opening Plant,”
www.forbes.com, May 11, 2015.
11. “Li Shufu Commenting on Geely’s Strategy towards Volvo: Setting Free the Tiger
Back to the Mountains,” www.globaltimes.cn, May 1, 2015.
12. Kelsey Mays, “Why Volvo is China’s Ticket to America,” www.cars.com, April 29, 2015.
13. Joe McDonald, “Volvo Prepares to Send ‘Made in China’ Cars to US,”
www.thejakartapost.com, April 23, 2015.
14. Katie Hunt, “Will the U.S. say yes to a ‘Made in China’ car?,” http://edition.cnn.com,
April 21, 2015.
15. “China’s Car Sales Growth Halves in 2014,” www.bbc.com, January 12, 2015.
16. Bradford Wernle, “‘Tier 2’ Luxury Brands Struggle to Compete with Elite Germans,
Lexus,” www.autonews.com, March 16, 2015.
17. Dan Mihalascu, “Volvo’s US Revival Plan Involves a Brand New Lineup in Five
Years,” www.carscoops.com, November 20, 2014.
18. John D Stoll and Sven Grundberg, “Volvo Needs to Gain U.S. Market Share, CEO
Says,” www.wsj.com, November 19, 2014.
19. Per Liljas, “Volvo is Banking on this Car to Crack the Top End of the World’s Biggest
Auto Market,” http://time.com, August 26, 2014.
20. Kyle Stock, “Owned by the Chinese, Volvo Swears It’s More Swedish than Ever,”
www.bloomberg.com, June 26, 2014.
21. Chris Wright, “Sweden: Geely’s Volvo Car on track – CEO,” www.just-auto.com,
March 24, 2014.
22. Agence France-Presse, “Volvo Cars Returns to Profit on China Sales, Cost Cuts,”
www.industryweek.com, March 21, 2014.
20
316-0253-1
23. Liang Dongmei, “After Growing Pains, Geely Seeing Growth with Volvo,”
http://english.caixin.com, March 20, 2014.
24. “China’s Booming Car Market is Terrific News for Western Automakers,”
www.businessinsider.com, January 9, 2014.
25. Sjoerd Beugelsdijk, Steven Brakman, Harry Garretsen, and Charles van Marrewijk,
“International Economics and Business: Nations and Firms in the Global Economy,”
Cambridge University Press, 2013.
26. Kenneth Rapoza, “The Future of China's Luxury Auto Market,” www.forbes.com,
April 1, 2013.
27. Anna Molin, “Volvo Car’s 2012 Sales Drop 6%,” www.wsj.com, January 7, 2013.
28. Michael Hitt, R. Duane Ireland, and Robert Hoskisson, “Strategic Management Cases:
Competitiveness and Globalization,” Cengage Learning, 2012.
29. Norihiko Shirouzu, “Volvo Agrees Technology Transfer to Chinese Parent Geely,”
www.reuters.com, December 10, 2012.

30. “Volvo to Spend $11 Billion over Coming Years,” www.reuters.com, April 5, 2012.
31. Mike Peng, “Global Business,” South-Western Cengage Learning, 2011.
32. “Acquisition of Volvo provides Geely with Long Term Strategic Benefits: U.S.
Experts,” http://en.people.cn, August 13, 2010.
33. Fang Yan and Alison Leung, “China’s Geely Completes Volvo buy,” www.reuters.com,
August 2, 2010.
34. “China’s Geely Completes Volvo buy,” “http://ca.reuters.com, August 2, 2010.
35. Ola Kinnander and Keith Naughton, “Geely Buys Volvo Cars from Ford, Names Jacoby
CEO,” www.bloomberg.com, August 2, 2010.
36. Jeffrey Hays, “Automobile Industry in China,” http://factsanddetails.com, April 2010.
37. Norihiko Shirouzu, “Geely Plans Investments to Revive Volvo,” www.wsj.com, March
31, 2010.
38. “China’s Geely buys Volvo for $1.8bn,” http://news.bbc.co.uk, March 29, 2010.
39. David Welch, “Geely buys Volvo. Believe it or not, it could work,”
www.businessweek.com, March 29, 2010.
40. Joann Muller, “Can Geely Unleash Volvo’s Inner Tiger?” www.forbes.com, March 28,
2010.
41. Huang Yuntao and Jacqueline Wong, “Geely to Double Volvo Output with China Plant:
Source,” www.reuters.com, January 26, 2010.
42. Gilles Guillaume, “China Car Sales Top U.S.,” www.reuters.com, January 11, 2010.
43. Rachel Tang, “The Rise of China’s Auto Industry and its Impact on the U.S. Motor
Vehicle Industry,” November 16, 2009.
44. “Li Shufu: My Dream is for People all over the World to be Driving a Geely,”
www.thescottishsun.co.uk.
45. “Volvo Brand History,” www.autoevolution.com.
46. “Volvo Car Sales Top Half a Million for First Time,” www.marketwatch.com, January
8, 2016.
47. “Volvo History,” www.conceptcarz.com.
21

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IBS Center for Management Research

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IBS Center for Management Research (ICMR)

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Volvo’s Transformation under Geely:

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LI SHUFU AND GEELY

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high value of the Volvo brand.

Focusing on the Chinese Auto Market

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Source: “Geely History,” www.geely.com.

Exhibit II: Geely’s Organization Chart

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Income from other

Aspirations,” www.nada.com, September 11, 2013.

Suggested Readings and References:

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wwww.bloomberg.com, August 19, 2015.

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