The Transnational Marriage Between Geely and Volvo

Topics: Automotive industry, Volvo Cars, Automobile Pages: 8 (3128 words) Published: December 20, 2012
Table of Contents

Background and Introduction:……………………………………………………………………………………………………2
Geely Automobile holding Co.:……………………………………………………………………………………………….2 Volvo Car Corporation:…………………………………………………………………………………………………………..3 Financial status for these two companies before merger:………………………………………………………3

SWOT analysis:5
Strength:…………………………………………………………………………………………………………………………………5 Opportunity:…………………………………………………………………………………………………………………………..7 Challenge and weakness:………………………………………………………………………………………………………..8 Threaten:………………………………………………………………………………………………………………………………10 Future plans after merger:………………………………………………………………………………………………………..10 For Volvo:……………………………………………………………………………………………………………………………..11 For Geely:……………………………………………………………………………………………………………………………..13 Conclusion:……………………………………………………………………………………………………………………………….14 References:……………………………………………………………………………………………………………………………….14

The transnational marriage between Geely and Volvo
Background and introduction
After the merger of Daimler Benz and Chrysler, the Ford Alliance with Mazda, SAIC’s acquisition of Ssangyong, here comes the most ambitious acquisition in the auto history—Zhejiang Geely automotive group will spend 1.8 billion acquired the luxury auto brand Volvo. Although nearly all the previous mergers in auto industry ended up sadly, this acquisition, as chairmen of Geely Li Shufu said “it is the poor boy from the countryside marrying the rich girl from the city” is hoped to have a happy ending. Geely Automobile Holdings is one of the four largest independent private automobile manufacturers in China, which was founded in 1986 as a manufacturer of refrigerators, and then moved to manufacturing decoration materials in 1989, finally turning to manufacturing motorcycle parts in 1992. In 2003, Geely exported its first cars, and issued its IPO on the Hong Kong Stock Exchange in 2004. Now Geely locates its headquarter in Hangzhou, Zhejiang, and operates six car assembly and power-train manufacturing plants in China, which has the capacity of production of 300,000 vehicles and 300,000 engines and transmissions annually. The Geely group has invested hundreds of millions in RMB establishing Geely Automobile Research Institute, which can launch 4-5 brand new car models and engine models every year. It won the only First Prize of Scientific and Technological Progress in China's Automobile Industry in 2006, independently developed EPS, a pioneering domestic automobile electronic intelligent power steering system, and it has achieved major breakthroughs in hi-tech applications such as BMBS tire blow-out safety control technology, hybrid power technology, new energy automobiles, etc. Volvo Car Corporation, is a Swedish automobile manufacturer founded in 1927. It has a large range of products, from SUVs, station wagons (estates), and sedans, to compact executive sedans and coupes, and is well known for its high safety standard. Even before government safety regulation, Volvo had established its reputation of reliability and solidity. In 1999, it was acquired by the Ford Motor Company as part of its Premier Automotive Group. As a matter of fact, it is not Geely’s first crow-border deal. Geely partnered with Manganese Bronze, producing components for and assemble London Taxi vehicles in 2006. Later, on March 17, 2010, Geely announced its plan of becoming the majority shareholder of Manganese Bronze. In May 2009, Geely acquired the Australian gearbox maker Drivetrain Systems International. The truth is, this bold move is derived from its prior experiences, the foundation of Geely self-confidence. In addition to Geely’s own advantages, recent economic situation also promotes the process of acquisition. To face it, the global financial crisis dramatically stroke European, American and Japanese markets, while China showed resilience to this economic adversity, taking lead of emerging markets since. The resultant economic “imbalance” creates...
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