Aaron DiManna
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Volvo and Geely Reportedly to Merge

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The 2019 volvo xc90, soon to be a member of Geely-Volvo
Photo: The News Wheel

It’s no secret that most automakers are either under the umbrella of a larger organization (a la General Motors or Fiat Chrysler), but the upcoming deal that Volvo is considering could end up being a game-changer for the global market. The Swedish automaker is reportedly in talks to fully merge with the Chinese car manufacturer Geely to create China’s first true global car brand.

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It’s important to know that Geely technically owns Volvo already, but up until now, the two have operated as completely separate companies. According to Financial Times, this is because a majority of both entities are primarily owned by Geely’s unlisted holding companies. So far, the extent of their relationship has been the exchange of technology (mostly developed by Volvo and shared with Geely).

What does this mean for Volvo?

The proposed merger — which also includes the acquisition of EV manufacturers Polestar and Lynk & Co — would turn the nature of that relationship on its head, but not in a way that would strip the companies of their unique characters. Li Shufu, the chairman of Geely, stated that the full partnership will create a “strong global group” that will “strengthen synergies” without sacrificing each brand’s identity.

If there’s any fear left that the merger signals a Geely takeover of Volvo, that doesn’t seem to be the intention, according to an unnamed senior executive within the business. In the story published by Financial Times, the executive is quoted as saying, “Geely has proved itself to be impressively good at leaving Volvo alone. There is now enough trust at Volvo that they believe this will not be a Geely takeover.

Moreover, the restructured management system under the partnership is unlikely to jettison one of the men responsible for crafting Volvo’s evolving image: chief executive Hakan Samuelsson. The expectation is that Li — the current chairman — will retain his position, and Samuelsson — who will spend the rest of 2020 drafting proposals—will continue to play a  significant role, possibly as chief executive.

No matter who’s at the helm, this merger represents a major change in the automotive industry and could be the first step towards another global powerhouse on the market.

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