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.
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.
Aaron was born in a suburb of Toledo, Ohio and has managed to traverse most of the state between college and various shenanigans. Having majored in video game development and minored in film studies, he is a considerable fan of both forms of media. Additionally, he is available to explain why Mad Max: Fury Road is one of the best feminist films of all time at the drop of a hat. His aspirations include — but are not limited to — not accidentally adopting any more cats and developing a responsible sleep schedule. See more articles by Aaron.