Manufacturology

Will Volvo Cars go to China?

Room for one more? Pub­lic trans­porta­tion in China… Image: SXC.

The Chi­nese are every­where these days. Until now I’ve made no com­ment about Ford’s plans to sell Volvo Cars. But after my recent post on Chi­nese rail­roads, it feels timely to make a remark on the pos­si­bil­ity that Ford sells Volvo Cars to Chi­nese Geely.

I wrote a cou­ple of posts (here, here, and here) when the SAAB deal was in its final stages. In the SAAB case my rela­tion was a bit per­sonal since I worked a cou­ple of months in their BIW devel­op­ment depart­ment when I did my mas­ters the­sis at KTH’s vehi­cle engi­neer­ing pro­gramme back in 1998. How­ever, my rela­tion to Volvo is much longer: I’ve been dri­ving a Volvo S60 for the last eight years.

There was a time when a large major­ity of cars sold in Swe­den were either Volvo’s or SAAB’s. That was when SAAB was known for its turbo engines and Volvo for its boxy and safe design. Before the GM and Ford times. Today, both brands are just brands like any else. How­ever, sta­tis­tics from Bil Swe­den shows that Volvo keeps the posi­tion as the most poular car in Swe­den:

Newly registered cars in Sweden, February 2010:
 
1  VOLVO V70II
2  VW PASSAT
3  VW GOLF
4  VOLVO V50
5  KIA CEE’D
6  AUDI A4
7  FORD FOCUS
8  RENAULT CLIO
9  RENAULT MEGANE
10 VOLVO XC60

Ford bought Volvo Cars from its mother com­pany Volvo AB in 1999. By 2008 Ford was suf­fer­ing heavy losses and decided to put Volvo up for sales again. Chi­nese Geely Auto­mo­tive turned up as Ford’s buyer of choice at an early stage.

How­ever, Swedish news­pa­pers are now report­ing that there seems to be some sort of trou­ble with the Ford–Geely deal. It seems that Geely may be unable to get the approval of Chi­nese author­i­ties [SvD, SvD].

Two other par­ties have shown seri­ous inter­est in tak­ing over Volvo Cars. One is the Swedish “Kon­sor­tium Jakob”, which was formed by the auto engineer’s union at Volvo as soon as the Geely bid became known [reuters]. The Jakob con­sor­tium has man­aged recruit some influ­en­tial sup­port­ers, for exam­ple for­mer Volvo CEO Sören Gyll. A third bid­der is U.S. based group “Crown”.

Now that Geely seems to have some trou­ble, Jakob and Crown are express­ing con­tin­ued inter­est. Ford and Geely has agreed to sign a deal before end of March. Appar­ently, if that fails, and if, for any rea­son Geely turns out to be unable to close the deal, oth­ers are ready wait­ing to step for­ward. Being a Swedish Volvo owner, I can’t help feel­ing a slight hope that there will be a “Swedish solution”.

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