New parent firm Geely wants to take the firm upmarket - but current management disagrees

Existing Volvo management disagrees with new owners Geely over the direction the company should be taking.

This is according to Li Shifu, president of the Chinese firm Geely, which took control of Volvo from Ford three months ago. At the time of the takeover, he spoke of his desire to push the firm upmarket, building “high-level cars that compete with the Mercedes S-Class and BMW 7-series”.

Full story - Volvo rules out 7-series rival

But new Volvo CEO Stefan Jacoby believes that creating such cars “is a step too early” and the firm should instead concentrate on smaller, more fuel-efficient models that will allow the firm to achieve its annual sales target of 800,000 units by 2020, double what it is at present.

Despite Shifu's disagreements with Volvo management, he 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 ruling out larger models]."

Jacoby told Autocar earlier this month that Volvo needs to “focus on luxury” and “has lost its distinguishing points in its products”. He also said the brand must “stop copying the Germans”.

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11

17 November 2010

Shifu would do well to listen to Jacoby and the current management team.The downsizing trend will continue and Volvo need to get involved too.They need to regain their Swedish mojo too as in stylish and understated imho

28 January 2013

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17 November 2010

The chinese owners have been building huge production facilities for Volvo in china. The proposed volumes to be pumped from these factories seem to be far more than what local consumption would justify. I guess the present management would be under huge pressure constantly.

17 November 2010

[quote Flash Harry]Shifu would do well to listen to Jacoby and the current management team.The downsizing trend will continue and Volvo need to get involved too[/quote]

You couldn't be more right.

17 November 2010

The manufacturers in the pseudo-premium market - Volvo, Saab, Honda, Alfa(?) - have been struggling for years. Not enough volume, or the ability to raise prices, to generate profits. Going the premium route means a long struggle against established brands, see Lexus, and latterly Infiniti.

17 November 2010

The Volvo - Geely honeymoon period did not last long. Usually there would be at least a year before the first rows start. There has to be some give and take with Geely and the chinese have to realise that Volvo will only do what's best for both companies.

17 November 2010

[quote sierra]The manufacturers in the pseudo-premium market - Volvo, Saab, Honda, Alfa(?) - have been struggling for years. [/quote] I think this is very true in the western markets it will be interesting to watch how the badge plays out in China.

jer

17 November 2010

Could it be the Euro centric market is wholly different to the chinese. So do you create a Volvo brand for big luxury cars in China where peoples brand tastes are not yet entrenched or focus on small "e" cars for europe/USA where Volvo plays catchup to to the Germans. The answer has to be delivery both for Europe and China or deliver the Chinese option. The European small car appraoch is not an option on it's own. I'm reminded of the Lotus scenario applied in this case to volume not profit. Volvo have been chasing for years in Europe and USA volumes and never achieved it perhaps it is time to change. How the world has changed in the last few years.

17 November 2010

[quote Flash Harry]Shifu would do well to listen to Jacoby and the current management team.The downsizing trend will continue and Volvo need to get involved too.They need to regain their Swedish mojo too as in stylish and understated imho[/quote]

Here here

...the band was playing Dixie: double-four time...

17 November 2010

[quote thebaldgit]The Volvo - Geely honeymoon period did not last long.[/quote] I think it is simply a lack of experience at the Chinese side how to handle such internal communications. The way I look it is positive that the owner backs down in favour of the management. As others wrote, Volvo needs both compact models for the EU market and "executive" size sedans for the Chinese. But in any case the development must follow European standards and it is the C30 what needs replacement soon. I'm now in China (for the second time) and noted that Volvo can be seen on the streets, mostly black 2.5T S80s. The brand has definitely a potential now that the Chinese are backing it - and if Buick could become the most popular (semi-premium) brand...

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