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Volvo Technology to be used in creating new car model for Chinese Geely
Friday, 09 March 2012
Volvo Car Corporation and the Chinese owner Geely are launching
enhanced technology cooperation, with a focus on new technology
including electric and hybrid cars. This is another step taken to
create a common brand.
The emphasis will be on the transfer of existing technologies, aiming
to create a new premium brand of Geely Group for the Chinese market,
according to a letter of intent the companies signed in Shanghai on
Friday.
"It's not going to compete with Volvo, which is a luxury car brand, "said Yang Xueliang, a spokesman for Geely, to Reuters.
According to him, Geely is thinking of using all available technologies
that exist to develop products and create competitive advantage.
Volvo's CEO Stefan Jacoby, for his part believes that enhanced
cooperation is a step on the way to make China Volvo's second home
market.
Technology Exchanges between parent companies and subsidiaries are not
uncommon. But one expert warns that the cooperation may damage the
Volvo brand.
"Geely is obviously the one who benefits from the contract. But they
must be extremely careful in how they implement the exchange as it may
damage the image of Volvo as a premium brand, "said Yale Zhang,
director at consultancy Automotive Foresight in Shanghai, according to
Reuters.
Volvo and Geely had earlier announced that they plan to start a Chinese
joint venture that will develop and produce a domestic car brand in
China. For this to happen, however, three conditions must be met: a new
brand must be developed and produced, there must be research and
development in China and the development of cars that run on
alternative fuels.
When Geely bought Volvo from Ford Motor in 2010 e few eyebrows were
raised and on this channel we punditified that this was a big step for
the Chinese to engulf western technology.
The takeover was deemed to harm the image of Volvo as an established
manufacturer of premium cars. To alleviate those concerns, the chairman
Li Shufu repeatedly marked Volvo's independent status.
"Geely is Geely, Volvo, Volvo,” he had reiterated in public. So as usual what we’ll do is to wait watch and see what happens
By Scancomark.se Team
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