Tensions rise over Volvo's identity under China's Geely, sources say
Chinese owner Li Shufu frustrated with Swedish management over new models, sources say
The strategic path Volvo Car plans to follow is in question because of discord at the board level between new Chinese ownership and traditional European ways, according to two people familiar with the situation.
The 87-year-old Swedish carmaker, acquired by Zhejiang Geely in 2010, is torn between a desire to hang on to its roots - a focus on safety and Scandinavian understatement in car design - and a desire to turn the cars into large, flashy, high-end vehicles prized by affluent Chinese customers and which would compete head-on with BMW, Mercedes-Benz and Audi, the sources said.
Chinese tycoon Li Shufu, founding owner and chairman of Geely and chairman of Volvo since the takeover, is growing increasingly frustrated with Volvo's management team, many of whom are Swedish and other Europeans, according to a Volvo board member and another person close to the carmaker, both of whom declined to be identified because they are not authorised to speak to the media.
We should not be a copycat. It would not be in line with our … reputation
Volvo executives in Gothenburg, Sweden, believe that Li's strategy poses a huge risk.
The long-simmering discord appears poised to cause further turmoil inside the board of directors, which replaced Volvo's chief executive in October 2012, the sources said.
As the tussle over Volvo's identity drags on, Li and his close advisers are now asking, "Who is Volvo's real boss?" according to the Volvo board member.
The source said Li has been diplomatic in his dealings with management but that he might resort to "more forceful ways" to achieve his goals.
Those methods could include installing people more sympathetic to his vision on Volvo's management team and board, the source said.