Chinese Automaker Looking For More Global Reach As It Bids For Ailing Swedish Brand
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: