Geely Automobile Holdings Ltd. is planning to commence exporting cars that it develops with Volvo Cars to the United States in 2016. The Chinese carmaker is counting on the Swedish brand's reputation for safety and reliability to help it compete in developed markets. Geely participated in the Detroit auto show in 2006 and failed in its attempted to market its units in the US due to lack of consumer recognition and confidence.
Gui Shengyue, chief executive of Geely, told Bloomberg in an Aug. 23 interview that their acquisition of Volvo enhanced their image, adding that overseas consumers are seeing them as an international company.
He remarked that Geely's deliveries in the US and Europe will be banking on the jointly developed models. Geely chairman Li Shufu had the Geely and Volvo brands separate on worries that if the Swedish brand is associated with a Chinese marquee, its image and reputation would diminish.
The joint models may help increase Geely's reputation as it seeks to become the China's largest auto exporter. Han Weiqi, an analyst at CSC International Holdings, told Bloomberg that Geely and other Chinese carmakers consider overseas markets as very important in boosting sales and building their brands.
He noted that Chinese carmakers need to "try even harder in their home market given the huge potential demand." Geely disclosed last week that may become the country's biggest vehicle exporter this year with up to 180,000 exported vehicles.
In 2012, Geely sold 100,800 vehicles overseas, while Chery Automobile Co. delivered 184,800 units abroad, according to the China Association of Automobile Manufacturers. Chinese carmakers are intensifying efforts to expand abroad due to increasing competition in the country. According to the auto association, the combined market share of Chinese brands dropped to a five-year low in July 2013. [source: Bloomberg]