Volvo might share technology with Geely to make it more competitive in China

Article by Christian Andrei, on April 23, 2012

A decision will have to be made soon by Zhejiang Geely Holding Group Co. on whether to let Volvo Cars share technology with Geely or make the Chinese brand compete with other segments alone. In 2010, Geely bought Volvo from Ford. Li Shufu, the chairman of Geely and Volvo, said that developing a China-only "premium" co-brand will mean that directly competing with Volvo could be prevented.

But for this to work, Li has to achieve a delicate balance. When Li was interviewed at the Hangzhou headquarters, he said that keeping Geely “from dying” requires a lot of hard work. He mentioned that one of the ways to accomplish this is to mesh Geely’s mass-market cars with Volvo technology.

Li said that if it does borrow from Volvo’s technology, it will make sure that Geely cars (either the current brands or the new China-only brand) won’t damage Volvo's more upscale brand image. Li said that this premium brand would be positioned between Geely and Volvo.

He said that improving Geely cars will require advanced technology but at the same time, Geely cars have to be regarded as cars for the masses. The dilemma now is to balance “affordability and good technology."

Li said that Geely has to get an edge as competition in China (the world’s largest market by sales volume) has become so fierce. Under the technology sharing being envisioned, Geely’s engineering capabilities will have to be improved to get a solid foundation. [source: Autonews]

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