The largest acquisition in the history of the Chinese automobile industry: the Geely concern from the Middle Kingdom buys the Swedish company Volvo from the American Ford. The agreement was signed yesterday in Gothenburg, in the presence of Chinese Vice President Xi Jinping, who arrived in Sweden on an official visit in connection with the 60th anniversary of the establishment of diplomatic relations between the two countries, and Swedish Vice Premier and Industry Minister Maud Olofsson. Deal value: $ 1.8 billion, all funds required for the acquisition have already been received, while Geely has also prepared the capital necessary for the further development of Volvo car production.
Swedish media reports emphasize that "the agreement provides for the preservation of the autonomy of Volvo, the continuation of its commercial plans and further development." Upon completion of the deal, the company's headquarters will remain in Gothenburg, and Geely will also retain its Volvo plants in Sweden and Belgium. In addition, the new owner expects to build a Volvo plant in China "to saturate the company's cars in the Chinese market." The agreement states that Geely will maintain good relations with Volvo workers and employees, its trade unions, sales departments, and especially with consumers. “Volvo will be managed by Volvo management. The company will be granted independence in a strategic perspective. It will operate according to its own business plan. We are determined to maintain our brand identity and view Volvo as a Swedish company with a strong Scandinavian tradition, ”says Geely Chairman Li Shufu.
Volvo, like several other assets, Ford has wanted to sell since 2008, when this company and many of its competitors - both in the United States and around the world - faced serious financial problems. “The main goal of the deal is to find a new owner who shares the opinion of the Ford concern about the future of Volvo. We needed to find a new owner who can grow the business and at the same time take special care of the unique features of the Swedish brand. And who also responsibly treats the employees of the company and the society in which we work. We have found, and I am pleased to announce this, such an owner in the person of Geely, "says the vice president Ford Lewis Booth.
Volvo was acquired by Ford in 1999 for $ 6.5 billion. In total, Volvo employs 22 thousand people in the world, of which 16 thousand are in Sweden. Now the Swedish manufacturer assembles about 300 thousand cars a year - new plant in China should do the same. The trade unions gave their final consent to the signing of the contract only last Saturday, after meeting with Li Shufu and his explanations about the plans of the new leadership for the future. “We are delighted to have entered into an agreement with Ford that allows us to preserve and strengthen the legacy of the renowned Volvo brand. The brand will remain true to its core values of safety and modern Scandinavian design, ”said Li Shufu. According to him, the strategic goal of the Chinese corporation is to achieve production of 2 million vehicles per year by 2015. The acquisition of a well-known brand raises the prestige of the Chinese car industry. In addition, Volvo will open a more expensive segment of the European market and its sales network to manufacturers from the Middle Kingdom.
The Volvo concern, which has shown itself as a manufacturer of high-quality and reliable equipment, is one of the most influential representatives in Europe, in particular in the premium segment. It has several factories specializing in the production of different cars... The XC90 model for Russia is assembled in Sweden and Belgium. Chinese-built vehicles are sold in the Asian market.
Between 2000 and 2007, the Swedish brand did not develop much, offering customers older models with a limited range of engines. The next year was decisive for the company and served as a starting point for its further successful development. This is due to the conclusion of an alliance with Chinese Geely... In fact, the Chinese bought the Swedish company, but the agreement still looks like a merger.
The Chinese manufacturer committed itself not to change the name of the Volvo brand, to leave Sweden as the country of the manufacturer, and also not to use the Swedes' developments for the Gelly models.
In which countries are Volvo cars assembled?
There is a misconception that Volvo cars are assembled in Norway, Switzerland and even Germany. In fact, the brand's main European manufacturing facilities are located in the Swedish city of Torslanda, as well as the Belgian city of Ghent.
Until 2013, an enterprise in Uddevalla operated in Sweden, where the C70 model was produced. There are no other Volvo car assembly plants in Europe. In China, the assembly of Swedish cars is organized at a plant in Chengdu.
After the merger with the Chinese Geely, production volumes in Gothenburg did not decrease, but even increased. This was facilitated by significant Chinese investment.
Pros of merging:
- Serious investments made it possible to develop new cars, technologies and expand the brand's model range.
- Allowed to exchange experience with designers from Geely.
- For Volvo, the Chinese market opened up, where its products were exempted from duties.
- The staff of the enterprise has expanded, production lines have been updated and automated.
Second generation Volvo XC90
The company originally planned to release the new XC90 in 2009-2010, but due to the merger with Geely, the timing was postponed.
The world debut of the model took place in 2014, and the serial one at the plant in Gothenburg. The first cars were delivered to their customers in the spring of 2015. For the brand's birthday, the Swedes have released special version under the name First Edition with a circulation of 1927 units.
The cars were sold out in 47 hours.
In 2016, the model was awarded the North American SUV award. The winner is determined by a commission of independent journalists. The previous version of the car experienced a similar success in 2003. In addition, the crossover showed top scores in its class according to Euro Ncap.
Today such a brand as Volvo (Volvo) is world famous. But how did it all begin?
Vovlo: the history of the brand
The history of Volvo began in 1924 with a meeting of college classmates Assar Gabrielson and Gustav Larson. Together they founded a car company. They were assisted in this by SKF, a bearing specialist.
Their first brainchild, the Volvo OV4 / Jacob, was created in 1927. It was a convertible, equipped with a 4-cylinder petrol engine. A little later, they released a sedan and its extended version. As a result, about one and a half thousand cars were sold in two years.
When Gunnar Ingelau comes to the position of the president of the concern, the dawn of its activity dawns for the company. Things were going uphill. The export of Swedish cars to the United States of America was established.
Production also increased. Innovative technologies were introduced, such as the three-point seat belts designed by Niels Ivar Bohlin. Also has been improved brake system and crumple zones.
Volvo: country of origin
The history of the Volvo brand began in Sweden. When polling random passers-by to the question: “Volvo - whose car? Country of origin of this brand? " the results were as follows:
70% - Germany;
20% - Sweden;
15% - USA;
5% - do not know the answer to this question.
The Volvo concern today
In 1999, the concern sells factories for the production of passenger cars mobiles. And even later, in 2010, Ford Motor sells the brand to the Chinese company Geely. Volvo's history has gone through more than one crisis. But, having survived them, the brand expanded production. In the automotive industry, it redesigned and left the production of passenger cars. Today on the market you can see a wide range of products and services under the Volvo brand:
cars (trucks, buses, etc.);
engines;
automotive equipment;
construction equipment;
space components.
Many people associate the Volvo car brand with good safety and build quality. Combines great style, power and reliability. "I'm rolling!" - the name of the brand is translated in such a way that it fully justifies it. Anyone who is or was the owner of a car of this brand recommends it to others.
Volvo was founded in 1915 in the Swiss city of Gothenburg as a subsidiary of SKF, a bearing manufacturer. It was founded by former college classmates Assar Gabrielson, an employee of SKF and Gustav Larson. The idea to go into the car business came to young engineers in a restaurant, for beer and crayfish. After some time, SKF management approved their idea and allocated funds for the development and production of the first cars.
The name Volvo is derived from the Latin verb volvete, which means "I roll." The Volvo emblem is a symbol of iron and the god of war, Mars, who fought exclusively with iron weapons. The associations that this emblem should give birth to are reliability and durability.
In 1927, the first Volvo car- a phaeton with an open top and a four-cylinder engine. It was called OV4, and also had an unofficial name - Jacob. It was not just the first Volvo car - it was the first car made in Sweden. The Volvo Jacob had a powerful beech and ash chassis and suspension seats, which were rare in cars from the 1930s. Engine power 28 HP could accelerate the car up to 90 km / h.
In 1928, Volvo released its first sedan - the PV4, and two years later - its modification PV651, with a six-cylinder engine with a capacity of 55 liters. with. This model was used as a taxi in Sweden. In the same year, the first Volvo Type 1 truck rolled off the assembly line.
At the Stockholm Motor Show in 1944, Volvo unveiled the PV444. This passenger car became the “people's car” in Sweden due to its high quality and low cost. It was originally planned to assemble 8000 cars, however, due to the high demand, Volvo produced 200,000 cars. At the same exhibition, the company's first bus, the PV60, with a diesel engine was presented.
In 1951 Volvo switches to conveyor production... In the same year, the first Volvo Duete family car was released.
In the 1980s, the company began producing a new generation of cars. They featured a modern design and more powerful engines, which were refined to reduce fuel consumption. The main model of the 80s was the 760 in the sedan body, on which six-cylinder gasoline and diesel engines... It accelerated to 100 km / h in 13 seconds.
Today Volvo is owned by the Chinese concern Geely, which bought it from Ford in 2010 for $ 1.8 billion. However, Volvo's headquarters remained in Gothenburg.
TechnologiesVolvo
Throughout its Volvo stories paid special attention to the development of safety technologies.
The Swedish manufacturer was the first to equip its cars with three-point seat belts, laminated triplex windshields and lambda probes - sensors that help reduce emissions.
In the 1970s, Volvo developed the world's first child restraint system - a booster cushion and a special rear-facing child seat.
Much earlier than other companies, Volvo began to use its own innovative safety solutions on its cars - for example, the City Safety system, which prevents collisions at low speeds.
Volvoin motorsport
Since 2007, the team has been taking part in the world championship in road - circuit racing among body cars... Best achievement - 11th place overall in 2011.
From time to time Volvo exhibits its cars at the famous rally - the Dakar marathon. In 1983, the team won the compact truck class.
In addition, the Volvo concern participates in the European Truck Racing Championship. Cars under the Renault brand, which are produced at Volvo factories, won in 2010 and 2011.
Interesting Facts
Volvo is the first company in the world to set up its own dedicated crash investigation team. Based on the data from this unit, new safety systems for Swedish cars are being developed.
Volvo P1800, assembled in 1966, entered the Guinness Book of Records as the car with the most high mileage... It amounted to 4,200,000 km.
King Carl Gustav of Sweden drives a small hatchback on the roads.
Volvoin Russia
The history of Volvo in Russia began in 1973, when the state-owned company "Sovtransavto" bought Swedish trucks for international transport. The brand's representative office was opened in Russia in 1994. The V40 KOMBI models were especially popular in the 90s. In the 2000s, S-series sedans were the running models in Russia. Swedish cars have become popular among Russian car enthusiasts due to their classic design, high quality and reliability. These factors even influenced the formation of such a concept among motorists as Volvo as a driver. That was the name of the slow-moving, following the rules road traffic motorist who values comfort and safety.
The machines were well suited for operation in the difficult weather conditions of the country. In addition, their success was ensured by their low cost in comparison with cars of competing brands.
Today on Russian market presented big choice Volvo cars: C70 coupe with a hardtop, sedans and, station wagons V60 and V80, as well as all-wheel drive crossovers XC60, XC70, etc. Over the past six years, Russians have been buying about 20,000 Swedish cars a year. The most popular model is the XC90. Sales of this crossover account for about 30% of all models presented today.
The company has a small truck assembly plant in Zelenograd. In addition, in 2009, a Volvo Trucks plant was opened in the Kaluga Region, which produces up to fifteen thousand trucks a year. Manufacturing plants passenger cars in Russia Volvo is not planning to open yet.
Russian sales of Volvo this year, like that of other auto brands, still leave much to be desired: following the collapse of the market, the number of buyers in car dealerships has decreased significantly. Sales of the new flagship model XC90, which were supposed to start back in March, were eventually postponed and only start now (exact dates are still unknown). Together with a noticeable price cut for the lineup announced at the end of April, this should improve the company's affairs in Russia. At the same time, despite local problems Volvo, having passed into Chinese hands, has been demonstrating more than decent results in recent years, having managed to retain old customers and attract new ones.
In 2010, the Chinese did not just acquire the first European brand that came to hand. They bought a company primarily known for its security technology. It is with this that the Chinese auto companies from the very beginning existed (and still remain) serious problems: many cars were absolutely uncompetitive in terms of European or American standards.
Five years ago, the global economic crisis forced the American concern to get rid of surplus assets, one of which was the passenger division of Volvo.
The Swedish manufacturer was making losses, and Ford did not want to invest in the company during the crisis. As a result, the Americans sold Volvo to the Chinese auto giant Geely for $ 1.8 billion. At the same time, in 1999, Volvo cost the Americans 3.5 times more - $ 6.5 billion.
When Volvo passed into the hands of the Chinese, many auto experts and brand fans seriously expressed fears that Volvo would lose its image and that the Chinese, using Swedish technology, would not invest heavily in it.
But new Volvo owner hastened to assure that the brand will be given independence in a strategic perspective and the opportunity to work according to its own business plan.
“Cooperation with the Swedish brand is, first of all, security technologies. Volvo has a very strong position in this aspect of the automotive industry, - said the head of Geely Li Shufu at the end of April. “In addition, we are now focused on research and development work to create a new modular CMA platform (for the production of C-class cars). The C-class sedan will go into production in 2017 and will be the first car on new platform for the small CMA models, common to Geely and Volvo. The same platform will be received by the successor to the Volvo V40. "
“Based on this modular architecture, Volvo develops some products and Geely develops others of its own,
- clarifies Shufu. - They have different directions and completely different characteristics corresponding to positioning in their segments ”.
However, here it is worth admitting that Volvo did not initially count on such a format of cooperation. Soon after the deal, the then CEO of Volvo made it clear that no technical collaboration with Geely was out of the question.
“We understand ourselves as part of a financial, not an industrial holding, so we maintain independence, which is very important for us. We work with Geely in completely different areas of the automotive industry, which makes cooperation on a wide range of issues almost meaningless, ”he said.
Well, after a few years the situation has changed, and it is not hard to guess that the Chinese still managed to impose their vision of mutual cooperation on the Swedes.
For Geely, who lacked stars from the sky, the purchase of Volvo opened up access to unique safety technologies and other developments. But at the same time, the deal allowed Geely to become the first Chinese car company, which has developed not only in the European and US markets, but also in developing countries, becoming a global brand.
At least such plans are declared by Li Shufu, who is called the "Chinese Henry Ford". Geely plans to start exporting Swedish cars from factories in China to other countries in the near future. Among the export destinations, besides the United States, experts also mention Russia. Shipments will be made from the Chengdu plant in southwest China.
The Swedish company also does not hide that it is quite pleased with the cooperation. The main criterion is the growing volume of global sales.
According to Lars Danielson, head of Volvo China, 2014 was one of the best years for Volvo Cars. “More than 466 thousand cars have been sold, of all models,” Larson said. -
Business was also successful in Western Europe, which is also an important market for us. 56 thousand cars were sold in the USA. Overall sales were good, with our bottom line up 17% to $ 2.2 million.
However, the margin is still low.
The context needs to be borne in mind here. We invest a lot, invest in new products. Doing what the entire industry is doing would be much easier and the profits would be different. But the plan is what it is. "
The Chinese market for Volvo is the largest today, with a share of 17% of global sales last year. Sweden is on the second place, the USA is on the third with 12%. Next come the UK (about 9%) and the rest of the European countries - 7%.
“I don’t think that the Volvo company, having become the property of Geele, could have lost something,” says the general director of radio “Strana”, a well-known auto expert. - Quite the opposite: the brand has retained all its positions.
Yes, they had big plans for the development of the brand in the Chinese market, but so far they have not been able to achieve noticeable results.
Nevertheless, the fact that the Swedish brand is present in China, Europe and the United States is already good. Here we can cite as an example the fate of another Swedish manufacturer - Saab, which simply went bankrupt and ceased to exist. "
According to the expert, when both companies declare joint technical developments, they are very specific.
“For Geely, the purchase of Volvo was the shortest route to modern automotive technology. They, in fact, did not have their own developments. Therefore, speaking about the joint development of two brands, one must understand that all technical base only Europeans provide, and the Chinese side provides funding. Therefore, it is quite logical that the joint technical center of the two companies is located in Sweden, ”he said.
According to Denis Eremenko, general director of PodborAvto, the perception of the brand by Russian consumers has not changed since the moment it came under the wing of a Chinese company. “If the quality of car assembly, the design and positioning of the brand as a whole does not change, then the consumer does not even think about who owns the brand,” Eremenko shared his opinion with Gazeta.Ru. “The purchase of Volvo by the Chinese is just such a case, so this circumstance did not affect the demand on the part of Russian buyers”.
Volvo is not the only example. On the account of the Chinese - the purchase by Dongfeng Motor Group of 14% of the shares of the French concern PSA, which is going through difficult times, the acquisition of BAIC from Saab technologies. One cannot but recall the failed deal to sell the Hummer brand to the Chinese. In addition, it recently became known that the Chinese state-owned chemical corporation ChemChina plans to acquire the Pirelli tire brand for 7.1 billion euros.
But the same tactic is used not only by the Chinese. Indian has owned a British Jaguar for years Land rover and does everything not to be associated with the legendary premium brand among ordinary buyers.
