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Study: China still 10 years away from globally competitive car company

02/26/2013   [Original: Autoblog]
Category: China, Chery, Geely

Chinese car plant assembly line

It may be a spell before Chinese automakers are capable of turning out a globally competitive vehicle. That's the findings of a sprawling 200 page report by Bernstein Research. The group went through the trouble of purchasing two Chinese-made cars, importing them to Europe and disassembling them down to every last nut and bolt. The study also included in-depth interviews with CEOs at each of the major manufacturers, including Great Wall, Chery, Brilliance and SAIC among others. Researchers found that by and large, global partners aren't holding up their end of joint venture deals, with the vast majority of foreign automakers seemingly not taking the Chinese market seriously.

The one exception to that rule, according to Bernstein, is General Motors and SAIC. GM has pumped a staggering amount of cash into China, and as a result, SAIC seems leagues ahead of its peers on the design and engineering front. Speaking of engineering, the study found most Chinese cars to simply be reverse-engineered examples of foreign models, with the Toyota Corolla being the most popular. That's due in part to the fact that Chinese automakers spend $100 million a year on research and development on average. For comparison's sake, a company like Volkswagen or Toyota spends closer to $1 billion. The Truth About Cars has a closer look at the report's contents. You can find that writeup here.

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Report: London Black Taxi manufacturer sold to China's Geely

02/04/2013   [Original: Autoblog]
Category: Earnings/Financials, UK, Special/Limited Editions, Geely

London black cabs

Geely, the Chinese company that also owns Volvo, now owns Manganese Bronze Holdings (MBH), makers of London's Black Cab. MBH went into administration late last year, and some had looked to Geely to rescue the company in which it had a 19.7-percent equity stake. Although it's taken three months to strike a deal, and more than half of the workforce was let go, Geely finally agreed to buy MBH for 11.4 million pounds ($17.9M US).

The purchase confers to Geely "the business and principal assets" of MBH, including the intellectual property and trademarks, equipment, properties, unsold stock, "goodwill" and complete ownership of the China-based joint venture in which Geely was producing the Englong SC7-RV. Happily for fans of the iconic product, the deal keeps production in Coventry and Geely has stated its desire to reestablish and grow the firm.

Reasserting authority in the UK taxi market and getting back in the good books of owners will take money and commitment. Manufacturers like Nissan and Mercedes-Benz have been poaching former owners of LTI products, and what current owners have seen as a lack of service and support has turned apathy into ire. Geely will need to put the time and money into new, competitive and reliable models to make a success of its latest purchase. If those new models can retain the Black Cab's aesthetic place in the London streetscape, all the better for it.

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Report: Volvo agrees to transfer tech to new parent Geely

12/12/2012   [Original: Autoblog]
Category: China, Tech, Volvo, Geely

Volvo emblem on grille

Following the acquisition of Volvo by China's Zhejiang Geely Holding Group in 2010, we definitely saw this news coming. The two companies have signed an agreement that will give Chinese automaker Geely access to key technologies developed by Volvo, and in turn, the deal could help the Swedish automaker lower its production costs.

As a part of the "technological cooperation agreements" signed by both companies, Automotive News China reports that Geely will be able to tap Volvo for three much-needed technologies, including the use of a midsize platform, Volvo's proven safety innovations and interior air quality systems. The latter two technologies are important to improve the crashworthiness of Geely's cars, along with helping isolate vehicle occupants from China's often severe air pollution. The report says that Volvo tech will likely be used on a premium car brand that Geely is expected to create.

Volvo, on the other hand, is to benefit from the "local market exploration experience and cost control experience" of Zhejiang Geely Holding Group, which is technical way of saying that Volvo will be able reduce its costs by tapping into Geely's established supply chain.

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Rumormill: Boardroom battles may be hurting Jacoby's bid to turn Volvo around

10/05/2012   [Original: Autoblog]
Category: Euro, Volvo, Rumormill, Geely, Luxury

Escalating tensions between Volvo CEO Stefan Jacoby and Volvo Vice Chairman Hans-Olov Olsson may be working against the Swedish brand's stated goals of regaining lost European market share, as well as remaining relevant as a luxury brand on the world stage.

Reports indicate that Jacoby and Olsson have clashed on statements made about Volvo group strategies, as well as butted heads on a "key executive appointment" in recent weeks.

Some of the conflict is by design, oddly enough, as new Chinese owner Geely intentionally brought Olsson back into the fold - the Swede is a former CEO of Volvo himself and has served some four decades with the company, all told - to keep Jacoby sharp. However, the Geely-devised system of "checks and balances" may be off the rails at this point, as the battle has become increasingly intense and is said to have held up some day-to-day decisions.

To make matters worse, Jacoby has been out of the picture for a bit after suffering a small stroke last month and taking medical leave.

Despite these insider reports of troubled times, Geely chairman Li Shufu (who also serves as chairman of Volvo) seems to believe that the arrangement is working as planned. It was Li that tasked Olsson with with closely watching Volvo management, as it tries desperately to turn around its lately flagging fortunes.

On the record, the company has stated that all is well in the house of Volvo. Spokesman Per-Åke Fröberg responded to the agllegations flatly, "There is no conflict between Stefan Jacoby and Hans-Olov Olsson."

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Report: Volvo CEO Jacoby suffers mild stroke, takes leave

09/24/2012   [Original: Autoblog]
Category: Etc., Volvo, Geely

Stefan Jacoby, Volvo CEO - headshot with Volvo stand in background

Reuters reports that Stefan Jacoby, CEO of Volvo, has suffered a mild stroke. It happened last week, and although Jacoby says he has limited movement in the extremities on his right side, he says he's already begun improving.

Jacoby, 54, is "under medical supervision" and will be on sick leave for a month. It's a busy time for the company captain as a he works out how to convey the full value of Volvo offerings and is apportioning Geely's $11 billion investment, not to mention supervising the launch of the V40 Cross Country and a considering a Mini rival. Company CFO Jan Gurander has taken over in Jacoby's absence. We wish Jacoby a speedy and complete recovery.

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Report: Chinese automakers hope to boost exports

05/15/2012   [Original: Autoblog]
Category: China, Euro, Chery, Geely

Great Wall Phenom

We've heard for years that Chinese automakers hoped one day to export their wares to the United States. Ironically, the global economic slowdown could be what gives the Chinese incentive to finally make it happen.

Chinese automakers ramped up production capacity to meet surging demand at home only to see the local economic conditions slow from 30 percent growth in 2010 to just 2.5 percent in 2011. On top of that, the Chinese auto marketplace has now become crowded with foreign and domestic competitors.

"The rapid growth phase of China's auto market is coming to an end, and we see exports as one possible outlet for all the capacity we have built up," Xing Wenlin, Great Wall Motor vice president in charge of overseas markets, tells Reuters. Great Wall's Phenom concept (pictured above) was shown a few years ago as a possible export model.

While most Chinese-made cars aren't up to American quality expectations, developing automotive markets like Egypt, Ukraine, Brazil and Indonesia are clamoring for cheap, reliable transportation. Chinese automaker Chery said earlier this year it would be selling cars in Europe by 2015.

Geely's purchase of Volvo in 2010 has boosted the Chinese company's automotive technology expertise and could help it achieve its goal of doubling exports to 70,000 units this year. While the U.S. is still out of reach for most Chinese automakers, Geely may begin selling a Chinese-made car in the UK by the end of this year. If successful there, a logical next market would be North America.

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Report: Geely announces $11 billion investment in Volvo

04/09/2012   [Original: Autoblog]
Category: China, Plants/Manufacturing, Volvo, Earnings/Financials, Geely

Li Shufu and Stefan Jacoby of Volvo Volvo is poised to rapidly inflate its presence in China, and it believes the way forward is through an $11 billion spending plan. "We want to revive Volvo and give the brand its strength back," says Li Shufu, Chairman of Geely Automobile Holdings. Speaking with German magazine Wirtschafts Woche, Shufu disclosed that Geely will put up $11 billion for a new engine factory, increased research and development and technology upgrades. However, Volvo's Per-Ake Froberg tells Reuters that Volvo itself will be providing the funds through borrowing and other means.

No matter where the funding comes from, the investment is meant to aggressively drive the Volvo brand in the Chinese market, where the Swedish brand sold about 50,000 cars last year. Geely wants Volvo to account for 20 percent of the premium car market in just three years(!) with a target of 200,000 vehicles for 2014. It's all part of an ambitious plan to double Volvo sales over the next ten years, and for its stewardship, Geely will get a new premium brand for China that uses Volvo tech and engineering. In addition, the two brands will be combining their purchasing power to get better deals from suppliers and small engine and electric vehicle development will also be shared between Volvo and Geely.

As the last Swedish brand standing, it's heartening to see that Geely has designs on increasing Volvo's sales. Here's hoping the recently voracious appetite for cars in the Chinese market doesn't shortchange American buyers looking for Nordic iron.

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Rumormill: Volvo bidding for (parts of) Saab

02/24/2012   [Original: Autoblog]
Category: China, Etc., Euro, Plants/Manufacturing, Saab, Volvo, Earnings/Financials, Geely

Saab and Volvo cars positioned together

Volvo is reportedly interesting in getting out its checkbook in search of a production parts bargain over at Saab. No, the 9-5 likely won't be wearing a Volvo badge any time soon, but the tooling that helped build parts for the big sedan could one day be in a Volvo factory.

SaabsUnited quotes an unnamed source who states that Volvo is interested in purchasing tooling from the Saab bankruptcy estate. The source reiterated that Volvo isn't interested in any production at the Trollhättan factory, adding that the purchased parts would likely travel to China for use by Volvo owner Geely.

While we're putting this story in the rumormill for now, purchasing expensive tooling at a fire-sale discount sounds like a potentially brilliant idea for Geely and Volvo. Volvo could soon begin building vehicles in China to expand its presence in the emerging market, and it always helps to get such a project off the ground with some high-quality parts that obviously haven't been used much lately.

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Report: Volvo designer Horbury headed to China with Geely

11/03/2011   [Original: Autoblog]
Category: China, Volvo, Geely, Design/Style

Peter Horbury, Volvo designWhen you think of designer Peter Horbury, Volvo follows logically. Soon, we'll all have to expand our thinking to leap from mention of Mr. Horbury to Chinese automaker (and Volvo owner) Geely. The well-regarded designer has been linked with Volvo for decades, and now he's reportedly adding styling responsibilities for Geely to his to-do list. He'll pack his bags in Gothenburg, Sweden where he's been vice president of Volvo design, and touch down in China to offer his talents to the Geely Group as it works to grow its brand and eventually offer its vehicles worldwide.

Bringing a steady-handed designer to lead its styling efforts will help Geely stand apart from its sometimes weirdly penned compatriots. Looking at what the British designer accomplished during his tenure at Volvo, going from iconoclastic boxes to a decidedly curvy design revival in Gothenburg, he's already masterminded what Geely needs to accomplish. The best part is that it's not a loss of design continuity for Volvo, as he'll stay on there, but it's a whole new playground for Mr. Horbury to devise a new design language.

This should be interesting.

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Geely channels London's iconic taxi with Englong SC7-RV for Shanghai

04/16/2011   [Original: China Car Times via Autoblog]
Category: Wagons/Estates, China, Commercial Trucks, Shanghai Motor Show, Geely

Geely SC7-RV

Geely Englong SC7-RV - Click above to view the image gallery

Chinese automaker Geely is part owner of Manganese Bronze, which makes the famous black taxi cabs for the UK and Chinese markets. But while a pricey cab makes sense for the UK, a high-dollar cab in China isn't always profitable. For that reason, Geely will introduce the Englong SC7-RV next week at the Shanghai Motor Show.

While the instantly recognizable UK taxi does its job well, it utilizes a platform that is totally unique. By contrast, the Englong SC7-RV will reportedly use a platform from Geely's existing fleet. And since the parts are common and the production will likely occur in China, costs are expected to dip considerably. And if you ask us, the SC7-RV actually manages to look kind of cool. Even better for prospective taxi owners in China, this livery special will likely make it to production.

Gallery: Geely Englong SC7-RV

Geely Englong SC7-RV

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