Will Geely sell Volvo in the next decade? | Geely’s 'Fission'

The vision was beautiful—but the development trajectory between Daimler and Chrysler did not unfold as expected. Burdened by costs and other factors, Chrysler posted losses year after year, weighing heavily on Daimler and ultimately forcing a breakup: Daimler eventually divested Chrysler. This same logic applied to Ford: at the end of the 1990s, Ford acquired Volvo and Jaguar Land Rover in succession, only to reluctantly shed them during the financial crisis—slimming down to survive. We do not deny Volvo’s technical prowess or its pioneering role in certain fields. Yet Volvo never possessed the sheer strength or long-term strategic vision of global giants like Volkswagen, Toyota, or Mercedes-Benz—its inherent limitations are real. A century-old brand, repeatedly sold and passed from hand to hand, no longer commands true independence or dominance—much like fellow Nordic companies Nokia and Ericsson, whose fates, though divergent in detail, converged in the end. Put more bluntly: Geely’s joint development with Volvo of the CMA and PMA architectures—and the merger of their powertrain departments—is analogous to Ford’s earlier acquisition of platform and engine technologies from Volvo. The difference is that Li Shufu understands human nature: while ‘drawing’ expertise from Volvo, he simultaneously offered equity swaps to give Volvo peace of mind. Meanwhile, Geely continues actively seeking higher-technology automotive firms and brands to empower its future growth—acquiring Volvo Group shares to enter the commercial vehicle sector; acquiring stakes in Daimler to collaborate with the inventor of the automobile; acquiring Lotus to advance lightweighting and other cutting-edge technologies. Li Shufu knows full well that competition in the auto industry ultimately boils down to core technological capability. Perhaps no one understands how to elevate Geely’s vehicle-making capabilities through collaboration better than Li Shufu does. A Decade of Miracles Let us acknowledge this unequivocally: Geely’s acquisition of Volvo stands as the most successful automotive business acquisition in recent years. What once seemed impossible became reality—thanks to Li Shufu’s infusion of capital, technology sharing, and the explosive growth of China’s auto market over the past decade—propelling both parties forward in leaps and bounds. Over ten years, Geely Auto’s annual sales surged from 320,000 units to a peak of 1.5 million; its market share climbed from under 3% to 6%, securing the top spot among domestic brands for three consecutive years. Meanwhile, Volvo’s global sales soared from 330,000 units a decade ago to 700,000 today; in China—the brand’s ‘second home’—sales skyrocketed from 30,000 to 160,000 units. Moreover, both Geely and Volvo have gained formidable internal momentum. With capital injection and operational autonomy, Volvo successfully revived and rejuvenated itself, establishing a global R&D and manufacturing system. Indeed, an automotive brand with 80 years of mature engineering experience needs only a gentle nudge to unleash tremendous energy. Of course, the greatest transformation has been Geely itself. From the moment Li Shufu set his sights on Volvo, he understood that this nearly century-old global brand had accumulated vast reserves of core technologies throughout its history. Geely could learn much—not only technical know-how but also manufacturing philosophies and management expertise—all of which would significantly upgrade Geely’s technology, production standards, vehicle-building competence, and brand value. Volvo’s contributions extend beyond boosting Geely’s growth and scale. Even in internationalized management and M&A experience, Volvo provided invaluable lessons and references for Geely’s subsequent acquisitions—including Proton and Lotus, Volvo Group shares, and Daimler shares.

Volvo restarts plans for independent listing—will Geely’s ‘integration’ strategy now face new uncertainties?

Produced by: Guancha.net Automotive Channel [WeChat Official Account: Guancha.net Automotive] / Auto Vision On May 12, Swedish luxury automaker Volvo announced it is evaluating the possibility of an initial public offering (IPO) on the Nasdaq Stockholm Exchange. Regarding why Volvo chose to list in its home country, Volvo CEO Håkan Samuelsson stated clearly that Volvo aims to become a leader in the rapidly expanding premium intelligent electric vehicle segment—and wants global investors to participate in this journey. Samuelsson also acknowledged, however, that whether the IPO proceeds will depend on prevailing market conditions. Li Shufu, Chairman of Geely Holding Group—the parent company of Volvo—said that over the past decade since Geely’s acquisition of Volvo, Geely Holding has fully supported Volvo’s transformation and development, enabling it to evolve into a genuine premium brand and significantly improve profitability. He further emphasized that, should Volvo ultimately go public, Geely Holding will retain its position as majority shareholder. Previous Attempts Already Made This is not Volvo’s first attempt to restructure its equity ownership. Since Geely Holding’s full acquisition of Volvo in 2010, Li Shufu has upheld his pledge that “Geely is Geely, Volvo is Volvo,” allowing Volvo to maintain relatively independent operations. Nevertheless, over the past decade—from the application of the CMA architecture to the establishment of the joint venture brand Lynk & Co—Geely Auto and Volvo have deepened technical cooperation under the same corporate umbrella. During the period following its acquisition by Geely, Volvo consistently posted growth in both sales and financial performance. Last year marked Volvo’s seventh consecutive year of sales growth, and its financial results turned profitable. Although the Geely–Volvo partnership is widely regarded within the industry as a win-win, Volvo appears unwilling to remain wholly owned by Geely indefinitely. As early as late 2016, Volvo issued convertible preferred shares to three Swedish institutional investors, raising 5 billion Swedish kronor (approximately RMB 3.7 billion). These investors collectively received a 1% stake, reducing Geely Holding’s ownership to 99%. This move was widely interpreted externally as a prelude to Volvo’s eventual independent listing. In response, Geely Holding CFO Li Donghui publicly denied any such plan, stating Volvo had no intention of going public independently. By 2018, rumors of Volvo’s independent IPO resurfaced. This time, Geely did not outright deny them. CEO Samuelsson, for his part, adopted a notably modest stance, saying the final decision on any listing plan would rest entirely with parent company Geely Holding. Volvo’s desire for financing is unsurprising. As the auto industry races toward the ‘four new transformations’ (electrification, connectivity, intelligence, and sharing), major manufacturers are pouring massive resources into emerging technologies. In June 2018, Volvo unveiled its ten-year mid-term plan, targeting that half of its annual sales volume would consist of battery-electric vehicles and one-third would be autonomous vehicles. Achieving these goals, naturally, demands substantial investment. Nonetheless, Volvo’s first IPO initiative ultimately fizzled out. Reports indicated that several valuation firms had appraised Volvo at USD 16–30 billion, whereas senior executives at Geely Holding valued the company at USD 30–40 billion—a significant gap between the two sides.

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