Dating back to 1927, when its first model was built, Volvo Group used to build trucks and cars, as well as marine and aero engines. In 1999, it sold its car business to Ford Motor for US$6.45 billion, and focused on commercial vehicles. Ford sold Volvo to China’s Geely in 2010.
China's Geely and Sweden's Volvo to join hands on vehicle research work
Geely is to build a research centre with Volvo Cars in Volvo's home country, Sweden, the first time a mainland carmaker has moved its research and development work overseas.
In one of the biggest co-operation efforts between Geely and its fully owned Swedish subsidiary, the centre will develop modular designs for the next-generation compact family cars for both companies.
The news came just before Volvo announced it planned to cut up to 1,000 mostly white-collar jobs by the end of the year. The company axed 1,100 jobs last year, mostly at assembly plants.
Volvo, acquired by Geely in 2010, saw sales dip by 18 per cent in January, it said on its website. Sales were down 6 per cent in 2012, to 422,000 cars.
Geely's chairman, Li Shufu, said yesterday that a joint research centre was the best solution for Volvo to share its knowledge and technology with Geeley without jeopardising its own brand integrity and individual product development.
"[The centre] should deliver on all the aspects a brand like Volvo requires in order to grow in the global premium segment," Li said. He said that it would also help Geely meet the demands of the high-volume segment.
The two companies have already begun searching for talent from Sweden and China to fill the 200 full-time posts on the engineering team. Geely expected the centre to start operating by the end of this year.
Analysts were upbeat about Geely's prospect, as they expected its efforts to acquire Western technology and expand its global retail network would pay off in the next two years.
Shares in the carmaker, which saw record year-on-year sales growth of 67 per cent last month, have jumped 86 per cent since September last year.
Additional reporting by AFP