Volvo Finally Goes Domestic In China
The Chinese auto market is the largest in the world, but most of the country’s autos are foreign – according to TIME , “More Chinese drive a Ford, Volkswagen or Nissan than a Chery, Dongfeng or Great Wall. And as buyers become more affluent, domestic marques are shunned even more.”
Back in 2010, Ford sold Swedish carmaker, Volvo, to a Chinese company known as Geely , and only now, is the company hitting the Chinese market with its first vehicle to be rid of Ford tech, the XC90. According to TIME, Geely has already invested $11 billion in the development process that the company hopes will bring about a renewed Volvo fleet by 2020.
Bin Zhu, a China forecast-team manager at consultancy LMC Automotive, tells TIME, “Volvo needed a lot of investment to develop new technology, while Geely had money but no strong development team.”
Geely now seems to have a good foothold in the right place, as Volvos have been known as mid-level vehicles that have flair like luxury cars but retain some practicality. China’s luxury auto market has been called a gem , but not for domestic manufacturers – it’s mostly German; Audi, BMW, and Mercedes. In fact, these three dominate 75% of the Chinese luxury market.
The company looks to be putting its hopes on an expanding domestic market in China by slipping past the Chinese-manufactured stigma that resonates in the country.
In this sense, Geely (and the XC90) could be single-handedly saving Chinese auto manufacturing. Bin also says, “If Volvo is successful, it will have a great significance on Chinese automakers. It could boost their confidence and set an example for the whole industry.”
Will Volvo push domestic Chinese auto manufacturing over foreign competitors? Is there a lesson here for American manufacturers? Comment below or email firstname.lastname@example.org .