Chinese Automaker Looking For More Global Reach As It Bids For Ailing Swedish Brand
Volvo's purchase by Geely has been rumored for months. So far, according to a Swedish newspaper, Geely's bid is the only "concrete" one to date. Image © rumerz.com
China Daily cites unverified reports today that China’s Geely Automotive has made the only “concrete” bid for the ailing Swedish automaker Volvo. If the reports by an unnamed Swedish newspaper prove correct, a successful bid for Volvo could mean the domestic Chinese automaker could be one (large) step closer to developing into a truly global brand, achieving its ambitions to produce luxury vehicles alongside the budget models that have made it popular in mainland China. However, since most major Chinese brands lack practical experience managing foreign workforces or doing business in developed automotive markets like Europe and the US, any potential acquisition by Geely would be either a distant possibility or simply unfeasible from the get-go. As these reports are, still, unverified, they have been whispered about before — however, we still have to take a wait-and-see attitude to this developing story.
Li Fangfang, who writes often on the automotive industry and particularly the way that domestic Chinese automakers are using the global economic crisis as a sort of springboard for their nascent brands, points out that Volvo’s potential sale could present unique opportunities but also serious challenges for Geely:
Posted in Automobile, Business, China, Investment, Luxury
Tagged acquisition, ford, geely, geely automotive, negotiations, purchase, volvo
Fashion Brand Sees Potential To Broaden Foothold In Lucrative, Yet Challenging Fashion Market
Ralph Lauren's sole free-standing location in China is located in Shanghai's luxury Jin Jiang Dickson Center. The company plans to branch out very rapidly in coming years
Wing-Gar Cheng writes for Bloomberg today that American retailer Ralph Lauren hopes to open 15 new stores in China annually in coming years. While the signature Ralph Lauren style has been adapted — or “copied”, depending who you ask — by brands with a long-time presence in China, like South Korea’s E-Land (not to mention counterfeiters throughout the country), the number of free-standing Ralph Lauren locations has remained limited. With the global demand for higher-end items remaining relatively anemic in the North American, Japanese, and European markets — despite improvements — China, with the high potential of its second- and third-tier cities, remains a sought-after target by mid- to higher-range fashion brands like Ralph Lauren.
As Cheng writes, rapid expansion in China is not simply driven by idealism. There is a great deal of untapped potential throughout the underserved mainland, well illustrated by a quote by George Hrdina, president of Ralph Lauren’s Asian business, who said, “We do more Ralph Lauren business on the island of Manhattan, New York, than we do in Hong Kong and China.” Clearly, adding 15 stores per year is less unrealistic than it may initially sound.
Posted in Business, China, Culture, Fashion, Investment, Luxury
Tagged bloomberg, China, chinese, Fashion, hong kong, Luxury, LV, LVMH, mainland china, New York, polo, ralph lauren, wing-gar cheng