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Volvo’s Future Under New Chairman

When the world economic crisis struck, the automotive industry was heavily hit and Ford none more than most. Some car brands were sold and it was during this period of realignment that Chinese car manufacturer Geely bought out the Volvo brand.


Geely’s billionaire chairman, Li Shufu, after an aborted attempt to woe American consumers with their own MR7 171A, decided to purchase the well-known Swedish marque. The deal proved to be a complicated one as much of Volvo’s architecture and equipment was shared with Ford Motor Co, making the deal difficult to resolve. In the end Geely was given certain technologies with the deal and other aspects were let under licence.

Union worries also gave the deal brokers headaches, as it was feared that the company’s operations would be moved to China. After much consultation the unions and workforce were brought on side and the deal brokered.

Under Li, Volvo are now building a new heavily automated and non-unionised plant in China and they plan to double its world sales figures, selling around 150,000 units annually in China alone. Their current aim is to manage the integration of the Volvo and Geely companies and successfully handle the differences in cultural operations and expectations to make the new Volvo an economic success.

Li’s plans to make Volvo a major player in the world automotive market, keeping it as a premier Western brand but helping the company grow as well. He believes that profits can be made by increasing the level of production, using new manufacturing methods to reduce costs and make the vehicles less expensive by bringing down unit costs.

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