Volvo CEO upbeat about joint venture with China
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Stefan Jacoby, president and chief executive officer of Volvo Cars, said he was positive about the future of a joint venture his company runs in cooperation with China's private automaker Geely. [Full coverage: Geely buys Volvo]
"We are looking for joint cooperations with our sister company Geely.We will have access to the supply base Geely has in China which offers opportunities and we are also looking into opportunities to jointly further develop electrifications of all vehicles," Jacoby said as the keynote speaker unveiling the 2010 Los Angeles Auto Show in Los Angeles Convention Center Wednesday.
"I see no reasons to be concerned in that area in respect with Volvo and Geely," he said.
Geely, a Chinese automaker run by Li Shufu, an aggressive entrepreneur, bought Volvo from Ford earlier this year at 1.5 billion U.S. dollars. Volvo is in the process of setting up a Chinese headquarters that mirrors its home office in Goteborg, Sweden, Jacoby said.
Published reports suggest the brand plans to build as many as 300,000 vehicles a year in China. Volvo expects to sell about 380,000 vehicles in the entire world this year.
"I can imaging we can sell 800,000 cars per year in 2020," he added.
Volvo entered China in 1984 ,according to Jacoby. Volvo has an assembly factory in China, but the production is limited.
In 2010, the sales are up almost 50 percent that than in 2009, Jacoby told the Motor Press Guild on the sidelines of the biggest annual auto show on the western coast.
"Our Chinese shareholder open up possibilities for significant expansion," he said.
Jacoby, 52, said that Europe, China and the Untied States will be the core markets as Volvo grows.
Answering questions about the setting up of a joint venture with Geely, Jacoby said that Volvo will not give up its pursuit for unique Scandinavian designs, high standards for "solid quality, reliability and safety."
"We would be stupid if we would give up these values."
However, China, as a fast developing country in the world, has its own different segment, the German-born former Volkswagen of America head, who joined Volvo in August, pointed out.
"We have to look into classical sedan segments which are having a predominant segment share in the UNited States but also in China. We are looking for cars in bigger sizes we have right now, we will adopt with extension of vehicle for the Chinese market as well."
He mentioned "Being Eaten By Dragon," an "interesting" article carried in a recent issue of "Economist" concerning Chinese takeovers, saying that he shares the view of Li Shufu, and both of them agreed that "it is essential that Volvo continue to be Volvo, and I'd like to state that Volvo will be even more Volvo than ever before."
Talking about Geely's takeover of Volvo, Jacoby said:" I think we have to get used to this. China is an integrated part of global economy. We produce in China, we export to China, we have to ultimately expect the Chinese investors investing their money in overseas enterprises."
Currency fluctuations make it "very difficult and challenging" to sell European-made cars in the United States, Jacoby said.
"Our first priority is to extend production to China," he said.
Volvo will make cars according to Chinese consumer's needs, Jacoby said.
"If you want to be successful in China, you have to listen to the customers in China, and adopt their cars as well."
Volvo will reveal details of its Chinese manufacturing plan within the next couple of weeks, Jacoby said.
At an Oct. 27 meeting in Stockholm, Sweden, Jacoby said that Volvo is considering setting up as many as three factories in China, with one of them in Chengdu in the southwest, if the Chinese government come over to the plan.
Volvo is making plans about dealership, and has not decided when to start to expand its productions in China, Jacoby added.
