Geely helps Volvo return to profitability

Ayisy YusofFriday, February 17, 2017
Volvo Cars China VP of design Jonathan Disley and Stegland (right) looking at a displayed Volvo model (Pic by Muhd Amin Naharul/TMR)

Geely Automobile Holdings Ltd’s acquisition of Volvo has helped the Swedish premium car brand return to profitability and inject the much needed capital to stem the bleed in the European carmaker.

Volvo Car Malaysia Sdn Bhd (VCM) MD Lennart Stegland said the acquisition has reinvigorated the Volvo brand on the global stage, allowing for new technology innovation and gaining back lost market share.

“With the new ownership, we have been able to fully develop the new Volvo technology.

“We are able to launch new powertrains with new plug-in hybrid and electrification systems (to return to profitability),” he told The Malaysian Reserve after the Volvo Tech Talk: A Design Story session in Kuala Lumpur yesterday.

Stegland said the Chinese carmaker had provided a “golden opportunity” for Volvo to make a comeback.

“We are back to our roots,” he pointed out. Geely had acquired a 100% stake in the ailing Swedish carmaker for US$1.8 billion (RM8.01 billion), injecting capital for the company to develop new products and boost vehicle engineering technology.

Known for its safety features, Volvo has evolved into a modern car manufacturer with the latest designs and advanced technology.

Volvo sold 534,332 vehicles last year and posted a profit for the third year in a row.

Western Europe continues to be the Swedish national carmaker’s main market, with 206,144 units of cars sold last year, and the US and China markets accounting for 18.1% and 11.5% of the share respectively.

Geely has been in the spotlight recently following its interest in Proton Holdings Bhd, as the national carmaker is seeking a foreign partner to turn its fortunes around.
Besides Geely, France’s PSA Group is also said to be eyeing a stake in Proton.

Proton is expected to announce its foreign strategic partner before the end of the first-half of 2017.

Geely — having started as a refrigerator manufacturer in the 1980s — also owns The London Taxi Co, which is famous for its black cabs.

Meanwhile, Stegland said VCM plans to increase the production volume from its plant in Shah Alam by 50% from the current 1,500 units by early 2018.
Presently, 60% of the cars produced at the plant are sold locally and the balance is for the export market.

Volvo sold close to 1,000 cars in Malaysia last year, a 100% rise compared to 2015.

The Swedish carmaker has been in the country for 50 years and its assembly plant in Shah Alam employs 450 staff.

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