New Chinese owners will free Volvo's inner tiger



If you were going to compare car brands with animals, which do you reckon is most like a tiger? Ferrari? Lamborghini? Porsche? Perhaps a bit of all three but not, surely, Volvo, the safety conscious Swedish maker of premium saloons, estates and SUVs.


But a tiger in need of freedom is how the boss of Chinese company Geely, which has just bought the company from Ford for $1.8 billion, sees this worthy middle class make.


"A tiger belongs to the forest. It belongs to the wild world and not confined in a zoo. We need to liberate this tiger," said Li Shufu of his company's new acquisition.


Geely has already announced plans to build a new factory in China to make Volvos, where the Swedish make has a pretty modest presence in what is now the biggest car market in the world.

That plant will make 300,000 cars. Last year, Volvo sold 335,000 cars from its Swedish and Belgian factories, though that was in a period of massively depressed car sales. In the past, Volvo has sold over 600,000 cars, which suggests the need for a major sales expansion in Europe and the US if they are to turn a profit and keep those factories busy. Otherwise Geely may have to close one of the European factories if it is to have any chance of returning Volvo to profit.

But Geely's intentions sound good. It says it will keep the Volvo operation, which is actually bigger than its own, separate from the Geely brand of low-cost cars.

"Volvo comes from Northern Europe and is rooted in Sweden," said Shufu. "Volvo will not be Volvo any more if taken out of the soil. The relations between Volvo and Geely in the future will be like brothers, not father and son."

All of which is good news for those anxious about the fate of a brand that after a strong start under Ford's ownership, has lately lost momentum, not least because the Blue Oval has been trying to sell it for the past few years.

Geely's challenge, however, will be to reinvigorate a brand that is uncomfortably squeezed by highly competitive mainstream makes like VW, Ford, Vauxhall and Peugeot on the one hand, and the established German premium players on the other, selling three to four times the number of cars that Volvo does.

And Volvo has to develop new models that buyers really want. Which sounds obvious, but it hasn't managed that since the big XC90 was launched several years ago – since then, only the smaller XC60 has come close to generating the same levels of desirability.

Right now, Volvo is more like a faithful, friendly and ageing dog that prefers to sit in front of the fire. It needs to turn into an animal a lot more exciting than that.

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