Geely Disagrees With Volvo's Vision

Only three months have passed since Zhejiang Geely Holding Group Co. President Li Shufu took ownership of the Swedish car brand Volvo and disagreements arose already. Li said he does not agree with Volvo's management about its product plans.

At the time of the takeover, Li spoke of his wish to push the company further, building “high-level cars that compete with the Mercedes S-Class and BMW 7-series”. Unfortunately Li hadn't taken into consideration that Volvo's target customers are different from those of the two German luxury brands.

But Volvo's new CEO Stefan Jacoby believes that building such cars “is a step too early” and the company should concentrate on small, fuel efficient vehicles that will help achieve the annual sales target of 800,000 units by 2020.

Li said it's normal to have different opinions on how to run the company, and that he will keep communicating with Volvo's managers to sort out their differences.

In spite of minor disagreements between the two management boards, Li said he would be willing to give in. "Why?," he said, "because they have brought Volvo to where it is today. So, they must have good reasons [for holding their position]."

Volvo is a niche brand in China, selling 22,700 units in the first nine months. Only two Volvo models, the S40 and S80L, are built by a Ford joint venture in the southwest China city of Chongqing.

To expand the brand, Li has announced plans to build two assembly plants and expand a third one in China. He also hired Stefan Jacoby, a well-regarded former Volkswagen executive with experience in China, to run the Swedish company.