Founder of the private company
Li Shufu set as a goal to enter the US market back in 2006 when the company first took part in the Detroit motor show. His previous attempt failed because of a lack of consumer recognition and confidence. However, Shufu thinks that the Volvo reputation for safety and reliability would enable Geeley to compete in developed markets using the Volvo brand.
A deal for Geely
to buy Volvo autos from the Ford Motor Company for $1.8 billion was reached in August 2010. Volvo headquartered in Sweden so far continues to operate independently although Geely wants to manufacture Volvo brands in China. Volvo has agreed to this but not the Chinese state as yet.
It was announced in late 2011
that Geely would begin selling Chinese-designed and manufactured cars in the UK by the end of 2012. Geely also has said that it intends to sell cars in Italy.
Gul Shengyue. the CEO of Geely, said:
“Our acquisition of Volvo enhanced our image and overseas consumers are seeing us as an international company. Our deliveries in U.S. and Europe will be banking on those jointly developed models.”
Geely kept the Volvo and Geely brands separate fearing that associating the brand with the Chinese auto maker might diminish the Volvo brand power. Han Weiqi an analyst from Shanghai said:
“Overseas markets are very important to Geely and other Chinese automakers to help them boost sales and build their brands, Even so, they still need to try even harder in their home market given the huge potential demand.”
The company claims that it may become China's largest vehicle exporter this year as it may ship as many as 180,000 autos overseas. Last year, Geely sold just over 100,000 vehicles abroad far behind the over 184,000 sold by Chery Automobile Co
. Domestic manufacturers are trying to expand markets abroad as they lose market share within China itself to foreign competitors.
Geely has a target of 60 per cent of sales abroad by just 2018. The company plans to produce a sport utility model next year to compete in that fast growing market.