Volvo hands over XC90 to Geely

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volvoxc90 Volvo hands over XC90 to GeelyThe Geely XC90 is on its way, if you believe Chinese media reports.

Volvo has handed the XC90 platform over to its Chinese owners ahead of a new version launching in 2014, the National Business Daily is reporting that Geely will use the XC90 platform to develop yet another high end brand for the Chinese market with the XC90 being the highlight of the new brand. The agreement to hand over the XC90 to Geely was signed on March 9th of this year, but it is not yet clear if any other vehicles were included in the transfer. The next generation XC90 is currently in development and will hit the market in 2014.

The XC90 is no new vehicle, the P2 platform on which the XC90 is based was first aired in 1999 and was developed prior to the Ford purchase of Volvo, the same platform underpinned several cars such as the S80, Ford Taurus and Lincoln MKS sedan

Geely launched their first SUV at the Beijing Auto Show, the GX7 SUV is the first AWD product from the company, the compact SUV is powered by a 1.8L engine and a six speed manual gearbox.

 

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23 Comments

  • TheK
    May 22, 2012

    Great, more brands! China has so few ;)

    Why don’t they update the external part a bit and sell it as an “Engrand EX9″?

  • I _ H a t e _ C h i n a
    May 23, 2012

    @ MannyZ

    If that’s your understanding of how auto industry works, then it explains why you get the false impression that Chinese brands could catch up soon.

    Japanese and Korean auto industries are vertically integrated, that is there is a tight and exclusive buy relationship between the auto maker and the auto parts suppliers. When an auto maker decides to improve the quality of its product, it doesn’t invest in QA improvement of itself, but in its suppliers. Companies like Toyota and Hyundai help their suppliers improve quality, reduce weight, and cut cost, in exchange for an exclusive supply relationship(Transferred/Co-Developed technology will not be shared with a competitor). This is why you just cannot buy parts from auto suppliers around the world to build quality cars, because the best parts aren’t available in the off-the-shelf market.

    Now, which Chinese automaker has this kind of long-term relationship with its supplier base? None. Chinese parts makers are just terrible in quality, and Chinese auto OEMs are not interested in building a long-term relationship with its suppliers; they are looking for a deal of week and will switch suppliers to save pennies. Foreign auto parts suppliers distrust Chinese automakers, and this is why the Volvo’s suppliers went to Volvo to retrieve their parts drawings when Volvo’s sales to Geely was being negociated.

    This is why it is not possible to have world-class Chinese brand cars, due to cultural differences.

  • MannyZ
    May 23, 2012

    IHC, I did not say anything that contredict exectly what you said. I call them vendors you call them suppliers. So, you now come back and tell me that Chinese companies are untrusted and that is why no credible and quality suppliers will work with them? Money, show the supplier the money and sign a contract. If the suppliers trust Kia and Fiat and Skoda, they would be comming with flowers to sign up with China.

  • Anon
    May 23, 2012

    1. Chinese automakers almost all have their own parts operations, which are improving just as rapidly as the automakers themselves.

    Heading towards world-class standards, by any measure, within 5 years.

    2. The overwhelming majority of parts are available at world class standards from multinational Tier One suppliers, almost all of which have now got large manufacturing platforms in China. Please tell me which parts are not.

  • I _ H a t e _ C h i n a
    May 23, 2012

    @ MannyZ

    > Chinese companies are untrusted and that is why no credible and quality suppliers will work with them?

    Yes

    > Money, show the supplier the money and sign a contract.

    And then Chinese OEM tear up the contract and give the parts drawing to a half-priced Chinese replica parts vendors six months later. This is why Volvo suppliers demanded Volvo to hand over their parts drawings during the Geely takeover negociations.

    Chinese have a long way to go before they could earn the trust of western consumers and auto parts suppliers alike.

    > If the suppliers trust Kia and Fiat and Skoda,

    Kia is a world-class automaker. Beside, most of Kia suppliers are long-time business partners who generate 70~80% of their revenues through Hyundai-Kia supply chain.

    Fiat is an Italian automaker.

    Skoda is a Volkswagen brand.

    > they would be comming with flowers to sign up with China.

    Chinese OEMs must first prove they will honor supplier IPs. Unfortunately, they have failed to do so, during Ssangyong and MG takeover disasters during which SAIC rooted parts drawings. Geely is another story and I haven’t heard of any IP violations that dogged SAIC, BYD and Chery, but Geely still carries the stigma of being a Chinese automaker.

  • I _ H a t e _ C h i n a
    May 23, 2012

    @ Anon

    > 1. Chinese automakers almost all have their own parts operations

    Which turn out poor quality parts.

    > which are improving just as rapidly as the automakers themselves.

    Improving quality would mean a higher cost, which is a kiss of death in cut-throat Chinese domestic market. In China where the average new car lasts 7 years before junked, there is no point in building parts to last 20 years like you see in western-market cars. Doing so incurs a huge cost penalty.

    > within 5 years.

    We heard that 5 years ago and things have gotten worse for Chinese domestic brands since, as foreign brands are killing Chinese brands in Chinese domestic market.

    > 2. The overwhelming majority of parts are available at world class standards from multinational Tier One suppliers, almost all of which have now got large manufacturing platforms in China.

    Those foreign-owned plants deal with foreign OEMs, not Chinese OEMs. It’s not like Chinese OEMs could afford the prices being charged by foreign auto parts makers, who are in China to support the operations of foreign OEMs, not Chinese OEMs.

  • MannyZ
    May 24, 2012

    Here is good example, I had an Engine Check for Oxygen sensor, I went to Toyota paid $220 for OEM replaced the sensor (Bank1 Sensor1).
    Within a year same OBD 2 code came back, but this time I went to the web and order Chinese non brand for $100, replaced. It is still working fine (over a year).

  • Brandon
    June 4, 2012

    Geely with low end products and now developing a middle line brand and having Volvo a high end product line sounds interesting and attractive for someone like me looking for an investment. I looked up the stock symbol and plan on buying some. Could be a great long term stock that just might make me a lot of $.

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