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Chinese Automobile Industry
• Cental Goverment, Local
Three Main Player in the
• Production of 13.8 mill units 2009China exceeded Japan as leading car
producer in 2009
• Joint Venture Foreign Firm and
• Less than 5 out of 1000 people own
• Growth peak in 2015Projected sales growth at 1mill
• Shanghai, Tianjin, Gaungzhou3 Main car manufacturing cities
Li Shi Fu & Geely Automotive
• Born 1963 in zhejiang province
• Founder of the Geely Holding Group
• His first business was photo services for tourist at
tourist site, for which he used camera and bicycle
purchase with RMB 100 school graduation gift.
• In 1997, he entered the automobile manufacturing
industry and has been devoted to the development
of China's auto industry over the past two decades.
“Nothing is possible,
one only needed to
1980 1990 2000 2005 2010
Geely founded on
Nov. 6 as a
The Geely Hoaqing SRV
rolled off the production
1st private company
authorized to produce in
Exported its 1st car
Listed in HK Stock Market
Joint venture with Manganese Bronze
holding, makers of london taxi.
Geely own 52% stake in shanghai LTI
Participate the north USA auto show.
Aquisition of australian drivetrain system
• Volvo Founded in Gothenburg, Sweden, in 1927
• Over next 70 years volvo cars became known for quality, safety and somewhat
quickly swedish style
• 1990s volvo had added concern for environment as a core brand value
• “It might be because the car is a little square and sluggish just like the swedes
themselves “ (the Volvo Way)
• “Cars are driven by people. The guiding principle behind everything we make
at Volvo, therefore, is – and must remain – safety” (Assar Gabrielsson and
Gustaf Larson, founders of Volvo)
THE FORD ERA
• Ford Purchase Volvo Car from the Volvo Group
in 1999 for $ 6.45 Billion. Volvo Truck and
Commercial Vehicles were not part of the deal.
• Volvo Car was part of formation Premier Auto
Group (PAG), a division focuses High End
• Volvo Suffered losses under Ford in 2006 and
Mr. Li about a
$1,6 billion in
cash and $200
$1,3 billion in
cash and $200
3 X more
The Effect of Acquisition For Geely & Ford
Geely stock rose 5.9
percent Monday in
Ford shares gained
39 cents, or 3
percent, to close at
$13.16 in New York.
Alternatives & Solutions
Volvo Sales 2010
• Expand in North America
• Expand in China
• Expand in the Far East
• Back to Luxury
The New Strategy – China Expansion
Global sales to
Create Volvo Cars China
Set up DCC*
Build a plant in Chengdu
Build a plant in Daqing
*DCC: Dialogue and Cooperation Commitee
• The expansion in China will not affect operations and employment in Europe.
• Shanghai will serve as Volvo Car China headquarters and centre for product development, design and
sourcing. To support Volvo Corporation R&D in Sweden regarding the development of electric vehicles and
• Focus on increasing sales in China and expanding dealer shops.
• Volvo Car Corporation will optimize its sourcing network in China for the global market.
• Volvo Car China will start to employ new staff to work with product development for the Chinese market
and support local production and purchasing.
“Geely is Geely and Volvo is Volvo.”
-Li Shu Fu
What happens next?
Volvo XC90 (2015) for US Market
Volvo global sales 2014: 466.000, rose
9% because of a significant increase in
Operating profit in 2014 rose 17.5%
In Feb. ‘15 announce they will invest $
500 miollion in its first US assembly
'Hi, we're Volvo. Remember us?‘
With the revamped XC90 getting ready to hit U.S.
dealerships this summer, the Swedish automaker is using
guerrilla tactics to reintroduce itself to the U.S.
1. Never underestimate the power of Chinese Company.
2. Image in luxury brand is everything.
3. China is a very big market with a fast growing luxury
4. In organizing two distinct organizational culture, the
cautious way is the best. (Volvo-Geely, Renault-Nissan).
5. Acquisition is one of the best way to capture technology
Once this tiger returns to the mountains
and carves out its own territory, it will
enjoy the market share that it is due.”
-Li Shu Fu
Geely Automobile In Figures
Year Started 1998
Total Workforce 15.248 (10% R&D Staff)
Customer Base Diversified & Fragmented
Manufacturing Facilities 8 Car plants, 2 Engines plans and 2 Gearbox plants
Product 7 major sedan models under 4 platforms
Number of Dealers 800
Brand Free Cruiser, Geely Kingkong, Vision, Geely Panda
Sales volume 2010 415.000 Vehicles
Five Key Brand Group Geely, Gleagle, Emgrand, Englon
Distributor Network 300 dealers in 45 countries
• Liminated glass (1944)
• The 3-Point Safety belt (1959)
• The rear-facing child seat (1964)
• The side impact Protection system (SIPS, 1991)
• Side Safety Airbags (1995)
• Head Protecting airbags(1998)
• BLIS (2004)
• Biggest overseas acquisition by a Chinese automaker
• 100% ownership of Volvo and related assets, including agreements on
intellectual property rights, supply and R&D arrangements
• Planned production 300 000 Volvo’s annually
• Double original Volvo production capacity
• Mainstream European brand vs domestic economy car brand
• Building a successful partnership between Volvo and Geely will
require a solid plan for post-acquisition integration
Geely Competitors & Suppliers
•China Motor Corporation
• Dragon Hill Wuling Automobile
• Brilliance China Automotive
• Zhejiang Geely Automobile
Parts & Components Company
• Shanghai Maple Engine
• IAC Group (Interiors)
• Autoliv Inc (Airbags)