Geely planning to up Volvo sales to one million by 2013
Geely’s ambitious plans to take on the premium automotive brand Volvo from Ford seemed to have a strange twist this week, with Geely apparently planning to boost sales to an impressive 1 million units per year by 2013.
Geely is planning a new Volvo factory in China which will be able to produce 300,000 vehicles per year for the Chinese marketplace, whilst other factories will be responsible for producing the remaining 600,000 cars for the European and North American markets.
Geely is planning to expand Volvo’s line up with upto three more luxurious models than what it is currently available, however, in a global market that is looking towards smaller, more fuel efficient cars, is it wise for Geely to go large when the world is going small?
Volvo China sales were a mere 12,600 units in 2008, but Geely plans to boost that to 200,000, and then 300,000 units by 2013. A Volvo S40 currently retails for 238,000rmb ($34,000USD) for the base 2.0L manual model, where as the the US version is around $27,000USD depending on specification. The only obvious solution is to bring the price of a Chinese built Volvo down to the same level as the Ford Focus on which it is based, but then even Ford only reported sales of just 227,839 for the first nine months of 2009, thats with a full line up of cars ranging from small cars, compact, mid size sedan, and MPV. If Geely do plan on getting Volvo’s game on in the Orient, then they are going to have to bring in more cars, and sell for less whilst still offering that premium car brand.
Sounds a bit too ambitious for where Geeley is now. Try 2020.
I was not looking up for this particular deal. However, then it struck me that Geely and Volvo both mean the same thing in Chinese. Maybe they are destined together in the previous life already, though I had not thought like this before.
what??! Volvo and Geely both mean the same thing in Chinese??! and I fully believe that Geely will be able to reach that goal.
Ed,
How is Geely going to reach that goal? Their sales will not go up until they have proven the quality did not go down for several years. That puts them past 2012 already. Their European sales are going to take the biggest hit right from the start also. Can they increase their Chinese sales to replace the loss of European sales and a drop in US sales? Seems doubtful but maybe we will see if they let the deal go through. 2 years isn’t enough time though. That isn’t even enough time to hardly add one new model unless they do it the Chinese way and throw random parts together to make a car. Then you are back to having a car that impresses no one.
Here’s how they might try to do it. Firstly, restyle and lengthen the S40 – and call it the S40L.
They also need to bring over the new S60 (probably in lengthened form too).
Also bring over the V50 – I think there’s a market for a premium wagon.
Finally, bring over the freshened version of the C30 quick and give it a price cut to battle A3 and BMW 1-series (which are both going to be locally produced).
But yeah, 200000 units – good luck.
I agree with the lengthened units, the S40 is tiny in the rear.
Volvo needs to come down a notch and become an affordable premium brand like Buick. Why would I buy an S40 when a Regal 2.0T is only 250,000rmb?
A premium wagon would sell in small units, the Legacy Wagon and soon to be launched Outlander are doing okay in small units here.
I would guess someone would buy the S40 because it looks way better and most likely drives much sportier than any Buick. If it doesn’t drive like a sports car it better be designed for optimal space inside and usefullness or be a small cheap piece of crap that gets great gas mileage. What is the point of a long buick with not musch space inside and the trunk not that useful. I guess I still think the way most Americans do. Small and good gas mileage, drives like a sports car or big inside and can put anything in it. I don’t get the cars between those lines.