Will Volvo be sold in the next decade? | Geely’s 'fission'

Ten years later, uncertainties have begun to emerge precisely in these four areas: once technology absorption is complete; when market expansion encounters upheaval; when financial pressure mounts; and when synergies give way to mutual interference. Internal fissures thus begin to appear. Looking even further ahead, deep-seated cultural differences rooted in corporate and brand identities will ultimately become the source of such rifts—just as Daimler, born in Germany, could not truly harmonize with Chrysler from the United States, or as Ford—native to America—ultimately failed to successfully manage automotive brands from Sweden, Japan, and the UK, each steeped in distinct cultures. This seems to echo the old adage: 'After a long period of division comes unification; after a long period of unification comes division.' Recalling bygone days 'Its purpose in acquiring Volvo has already been achieved; Volvo will soon be reluctantly divested by Ford, and Ford will inevitably sell it.' Over a decade ago, when journalists asked Li Shufu why he believed the acquisition of Volvo was feasible, Li Shufu replied thus. Indeed, behind every commercial move lies the driving force of interest. Whether to hold or to sell hinges not only on sentiment but also—and more importantly—on calculations of commercial benefit and value. Especially amid today’s industry turbulence, mergers and splits occur constantly: Volkswagen and Ford have formed an alliance; Mercedes-Benz and BMW have joined hands for long-term collaboration on autonomous driving R&D; and FCA and PSA completed a swift merger. Yet even as consolidation unfolds, fragmentation proceeds apace: the Renault–Nissan Alliance fractured following Carlos Ghosn’s arrest, and Tata Group, under competitive pressure, plans to seek partners for Jaguar Land Rover. For Li Shufu, having tasted the sweet fruits of integration, he has consistently championed consolidation. Recall his signed article published in foreign media in 2018, shortly after Geely acquired shares in Daimler: 'Automakers must cooperate—or risk being swallowed up. The industry must explore new pathways for collaboration and innovation; virtually no company can go it alone.' Thus, in February this year, Geely and Volvo announced plans to form a new automotive group, continuing coordination in finance, procurement, and R&D—and accessing global capital markets via a listed entity. Meanwhile, Geely still needs to learn from Volvo: at the end of last year, Geely planned to restructure its powertrain business jointly with Volvo; and in April, foreign media reported that Volvo may be exploring joint development of internal-combustion engines with Daimler to cut costs—a collaboration Geely is actively facilitating. Geely stands to become the greatest beneficiary of this series of technological cooperation and synergy. For Geely, continuously fostering such partnerships serves as a springboard—and shortcut—to entering the mainstream of the global auto industry. Examples abound, both within and beyond the automotive sector—just as Daimler’s merger with Chrysler once did: Chrysler sought entry into Europe, while Daimler aimed to expand its U.S. footprint. Each possessed vast, non-overlapping sales networks—in Europe and North America respectively—holding immense commercial potential beneath their integration. At the time, Daimler focused on passenger cars, whereas Chrysler specialized in SUVs, minivans, and light trucks; substantial opportunities for shared technical platforms existed between them. Indeed, the Geely–Volvo dynamic mirrors the Daimler–Chrysler case: Volvo possesses technological and R&D prowess but needs capital and access to the Chinese market; Geely, backed by capital-market mechanisms and China’s massive market opportunity, can leverage Volvo’s technology to build strong brand equity—and simultaneously harness Volvo’s global operational experience to accelerate its own globalization. Each side gains what it needs.

Volvo restarts independent listing—will Geely’s 'integration' generate new uncertainties?

Volvo’s desire to raise funds is hardly surprising. As the automotive industry advances toward the 'four new trends' (electrification, connectivity, intelligence, and sharing), major automakers are ramping up investments in emerging technologies. In June 2018, Volvo unveiled its ten-year mid-term plan, targeting that half of its annual sales volume would consist of pure electric vehicles and one-third would be autonomous vehicles by then. Achieving this goal naturally demands massive capital investment. However, Volvo’s initial IPO plan ultimately fizzled out. Reports indicated that multiple valuation firms assessed Volvo’s worth at $16–30 billion, whereas Geely Holding’s senior management valued the company at $30–40 billion—a significant gap. From 'merger' to 'collaboration' On the other hand, from 'Volvo is Volvo' to an increasing number of Geely-branded vehicles being built on Volvo platforms, technological integration between Geely Auto and Volvo continues to deepen. According to Geely Holding’s original plan, on the foundation of such technological convergence, Geely Auto and Volvo would gradually undertake business restructuring—culminating in full merger into a single company. Post-merger, Volvo’s assets would be folded into Geely Auto’s Hong Kong–listed entity, thereby connecting with global capital markets. Yet this merger process encountered numerous setbacks. Samuelsson revealed to the media that a full merger would trigger greater organizational conflicts and power struggles. In June 2020, Geely Auto—listed in Hong Kong—announced its return to China’s STAR Market (Sci-Tech Innovation Board) in Shanghai, whereupon Volvo promptly declared the merger plan suspended. After a year of deliberation, in February this year, Geely Auto and Volvo jointly announced a 'best-possible merger solution.' Under the new agreement, collaboration will focus primarily on forward-looking technologies—including powertrains, electrified powertrain systems ('three-electric' tech), and high-level autonomous driving—while both companies retain their existing equity structures. With the pre-existing equity framework preserved, Volvo’s plan for independent listing has recently been revived. A new win-win? Clearly, Volvo’s independent listing would dilute Geely Holding’s equity stake. Yet many industry insiders view Volvo’s equity diversification not as wholly detrimental to Geely Holding—but rather as potentially forging a fresh win-win scenario. Automotive market analyst Ren Wanfu notes that although Volvo’s sales and profitability continue to grow, it still faces mounting pressure from the electrification transition. Leveraging capital markets to accelerate this transformation benefits both parties. Meanwhile, though Geely Holding’s shareholding in Volvo would decline, it would not lose control over Volvo—and thus the impact on existing cooperation would remain minimal. In fact, amid the industry-wide surge toward the 'four new trends,' both Volvo and Geely Auto must significantly increase capital expenditure—thereby affecting their respective financial positions. Since 2010, Geely Holding alone has invested as much as $11 billion in Volvo’s Scalable Product Architecture (SPA); and Geely Auto’s joint venture brand Lynk & Co—with Volvo—has likewise consumed substantial financial resources. Although Geely ranks as China’s largest private automaker, its financial position is far from worry-free.

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