Geely and Volvo Still Negotiating Chinese Plants
Volvo's management wants to postpone its expansion until they have a solid business case. Discussions were described by the Financial Times as "heated, not acrimonious."
Geely and Volvo are in talks over expansion in China and the Swedish company's management will take a decision on "the first step of localized production in China ... within a couple of months," said Volvo spokesman Per-Aake Froeberg in a statement for Agence France Presse.
"It's a natural thing that there are discussions about such an important matter as the Volvo car strategy for China," Froeberg added.
After Geely had purchased Volvo from Ford in August, the Chinese company’s chairman Li Shufu said that Volvo's core values of safety, quality, environmental care and modern Scandinavian design will be preserved in the future. He added the brand would consolidate its position in the European and American markets and expand to China and other emerging markets.
"Li has a very strong belief in the future of Volvo in China and has a vision of up to three factories over a long period. That doesn't mean that he thinks decisions should not be based upon a firm and sustainable business plan," said Froeberg.
A joint venture between Ford and China's Chang'an currently builds Volvo's S40 and S80 models in the country. The brand has a target of around 30,000 sales this year in China, half of which are built locally.