China Economic Review
Charting China’s changing economic terrain · Since 1990
Geely’s Volvo bid marches on
November 1, 2009
If Zhejiang Geely Holding Group, the favored bidder — let us call it Geely for short — gets Volvo Cars, Sweden’s third-largest private employer, it may lose contracts with some suppliers unless it promises to protect their patents and not plagiarize products in China.Svenaake Berglie, who heads FKG, a group that represents 300 automotive suppliers, said, “Big, tech-heavy suppliers are definitely concerned about China’s record when it comes to copyrights and Volvo would be in real trouble if it ends up not being a preferred customer among suppliers. Just as carmakers choose suppliers, suppliers choose carmakers.”
Ford Motors has focused talks on the sale of Volvo to one bidder, a group led by Hangzhou, China-based Geely but it has not yet resolved concerns about protecting intellectual property.
The founder of Konsortium Jakob AB, the Swedish investor group that also wants to buy Volvo, said, “We need a competent owner with a long-term view. Most Chinese car companies are very immature — they haven’t been around for very long.”
Easy to forecast that Konsortium Jakob may note be with us for long, if it issues daft remarks like that.
Bloomberg said Volvo, which sold 374,297 cars globally in 2008 and saw sales drop 27% in the first half of this year, cut 2,700 jobs last year and then reduced its workforce by a further 3,300.