Has any brand other than Tesla had a better decade than Volvo? It is expected to be launched imminently at a valuation of between £ 15bn and £ 20bn, which is a huge return for Geely, which cleared a £ 1.4bn buy 11 years ago which many have claimed. questioned wisdom.
Volvo was something of a hopeless case, selling a meager 373,000 cars a year, all excluding architecture in need of an urgent and costly update. In turn, Geely was an aggressive and left-wing buyer, with owner Li Shufu turning from rural peasant to multi-billionaire largely due to his individual entrepreneurial spirit.
Most insiders of Ford’s former Premier Automotive Group (which in its heyday had Aston Martin, Jaguar, Land Rover, Lincoln, Mazda, Mercury and Volvo) will tell you it was doomed; that the emphasis on cost savings was too detrimental to diversified companies with their own biases and regional characteristics.
It should be noted, however, that one or two insist that Ford’s philosophy was right and that the failure was caused by the execution of the plan being too one-dimensional.
Regardless, Geely became the first Chinese company to own a global automaker, and as Michael Dunne recently commented in his Zozogo newsletter (a must read for anyone who follows the Chinese market), a tiger does was not caged. Quite consciously, perhaps even in a simplistic way, Geely bought Volvo, put it in management, gave it financing and let it work towards the set goals.
Sales topped 500,000 in 2015, and 750,000 seem realistic this year, if the shortage of computer chips permits.
Given the speed and scale of Volvo’s turnaround (necessarily built from common platforms, a streamlined engine lineup, and a constant reshuffle of its image), it’s easy to hold success from Volvo for granted. But, as evidenced by stories of senior Jaguar executives tearing their hair out as their numbers flatten out, it would be a huge mistake to assume that this result has been taken for granted.
Volvo is not finished yet, as Dunne convincingly explained. In recent years, Li has apparently concluded that the Geely mothership has become the kind of restraint Ford once was, with its size, corporate structure, and multiple levels of decision-making acting as an anchor. By launching Volvo on the stock exchange, he hopes to preserve both his independence and his agility.
Since the unique pressures of flotation ultimately undermined many successful businesses, it will be interesting to see if the theory rings true. But today, one thing is clear above all: Despite all the success, Li’s ambitions at arm’s length for Volvo still have a way to go.
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Source: www.autocar.co.uk
This notice was published: 2021-06-21 05:01:23
