Volvo and parent company Geely will investigate merging into a single company in order to become more competitive in the global car market. The Swedish car maker has been owned by Chinese giant Geely Auto Holdings Ltd since 2010 but remains a separate firm. Geely also owns brands including Lotus, Lynk&Co, Proton and LEVC. Volvo’s new…
The Swedish car maker has been owned by Chinese giant Geely Auto Holdings Ltd since 2010 but remains a separate firm. Geely also owns brands including Lotus, Lynk&Co, Proton and LEVC. Volvo’s new spin-off brand Polestar is jointly owned by the two.
Volvo says merging with Geely into a single global group would “accelerate financial and technical synergies”, with the “scale, knowledge and resources to be a leader in the ongoing transformation of the automotive industry”. It added that any deal would “preserve the distinct identity” of Volvo, Geely, Lynk&Co and Polestar.
The two companies have established a joint working group that will develop a proposal to send to each board. No timeline has been given for that process.
Geely chairman Li Shufu said the deal would “strengthen the synergies within the group while maintaining the competitive advantage and the integrity of each individual brand”.
Volvo and Geely already benefit from considerable shared technology, including the CMA and SPA platforms, and are in the process of merging their combustion engine divisions into a single firm.
Since Geely bought then-struggling Volvo from Ford, the brand has been revitalised and achieved record sales, largely thanks to the expansion of its SUV range. In recent years, Volvo has made several bold moves under boss Håkan Samuelsson, including setting the goal of becoming a maker of electric cars only within 20 years.
By merging, both Volvo and Geely could benefit from greater joint technical development and shared production facilities, which could be vital for them to remain competitive against giants such as the Volkswagen Group and the newly merged PSA Group and Fiat Chrysler Automobiles. It could also give Volvo access to extra production capacity in Geely’s China factories, while aiding Geely’s attempts to expand its brands into Europe.