Russian sales of Volvo this year, like that of other auto brands, still leave much to be desired: following the collapse of the market, the number of buyers in car dealerships has decreased significantly. Sales of the new flagship model XC90, which were supposed to start back in March, were eventually postponed and only start now (exact dates are still unknown). Together with a noticeable price cut for the lineup announced at the end of April, this should improve the company's affairs in Russia. At the same time, despite local problems Volvo, having passed into Chinese hands, has been demonstrating more than decent results in recent years, having managed to retain old customers and attract new ones.
In 2010, the Chinese did not just acquire the first European brand that came to hand. They bought a company primarily known for its security technology. It is with this that the Chinese auto companies from the very beginning existed (and still remain) serious problems: many cars were absolutely uncompetitive in terms of European or American standards.
Five years ago, the global economic crisis forced the American concern to get rid of surplus assets, one of which was the passenger division of Volvo.
The Swedish manufacturer was making losses, and Ford did not want to invest in the company during the crisis. As a result, the Americans sold Volvo to the Chinese auto giant Geely for $ 1.8 billion. At the same time, in 1999, Volvo cost the Americans 3.5 times more - $ 6.5 billion.
When Volvo passed into the hands of the Chinese, many auto experts and brand fans seriously expressed fears that Volvo would lose its image and that the Chinese, using Swedish technology, would not invest heavily in it.
But Volvo's new owner was quick to reassure that the brand would be given strategic independence and the ability to operate on its own business plan.
“Cooperation with the Swedish brand is, first of all, security technologies. Volvo has a very strong position in this aspect of the automotive industry, - said the head of Geely Li Shufu at the end of April. “In addition, we are now focused on research and development work to create a new modular CMA platform (for the production of C-class cars). The C-Class sedan will go into production in 2017 and will be the first vehicle on a new platform for the small-sized CMA models shared by Geely and Volvo. The same platform will be received by the successor to the Volvo V40. "
“Based on this modular architecture, Volvo develops some products and Geely develops others of its own,
- clarifies Shufu. "They have different directions and completely different characteristics, corresponding to positioning in their segments."
However, here it is worth admitting that Volvo did not initially count on such a format of cooperation. Soon after the deal, the then CEO of Volvo made it clear that no technical collaboration with Geely was out of the question.
“We understand ourselves as part of a financial, not an industrial holding, so we maintain independence, which is very important for us. We work with Geely in completely different areas of the automotive industry, which makes cooperation on a wide range of issues almost meaningless, ”he said.
Well, after a few years the situation has changed, and it is not hard to guess that the Chinese still managed to impose their vision of mutual cooperation on the Swedes.
For Geely, who lacked stars from the sky, the purchase of Volvo opened up access to unique safety technologies and other developments. But at the same time, the deal allowed Geely to become the first Chinese car company to expand not only in the European and US markets, but also in developing countries, becoming a global brand.
At least such plans are declared by Li Shufu, who is called the "Chinese Henry Ford". Geely plans to start exporting Swedish cars from factories in China to other countries in the near future. Among the export destinations, besides the United States, experts also mention Russia. Shipments will be made from the Chengdu plant in southwest China.
The Swedish company also does not hide that it is quite pleased with the cooperation. The main criterion is the growing volume of global sales.
According to Lars Danielson, head of Volvo China, 2014 was one of the best years for Volvo Cars. “More than 466 thousand cars have been sold, of all models,” Larson said. -
Business was also successful in Western Europe, which is also an important market for us. 56 thousand cars were sold in the USA. Overall sales were good, with our bottom line up 17% to $ 2.2 million.
However, the margin is still low.
The context needs to be borne in mind here. We invest a lot, invest in new products. Doing what the entire industry is doing would be much easier and the profits would be different. But the plan is what it is. "
The Chinese market for Volvo is the largest today, with a share of 17% of global sales last year. Sweden is on the second place, the USA is on the third with 12%. Next come the UK (about 9%) and the rest of the European countries - 7%.
“I don’t think that the Volvo company, having become the property of Geele, could have lost something,” says the general director of radio “Strana”, a well-known auto expert. - Quite the opposite: the brand has retained all its positions.
Yes, they had big plans for the development of the brand in the Chinese market, but so far they have not been able to achieve noticeable results.
Nevertheless, the fact that the Swedish brand is present in China, Europe and the United States is already good. Here we can cite as an example the fate of another Swedish manufacturer - Saab, which simply went bankrupt and ceased to exist. "
According to the expert, when both companies declare joint technical developments, they are very specific.
“For Geely, the purchase of Volvo was the shortest route to modern automotive technology. They, in fact, did not have their own developments. Therefore, speaking about the joint development of the two brands, one must understand that the entire technical base is provided only by Europeans, and the Chinese side provides funding. Therefore, it is quite logical that the joint technical center of the two companies is located in Sweden, ”he said.
According to Denis Eremenko, general director of PodborAvto, the perception of the brand by Russian consumers has not changed since the moment it came under the wing of a Chinese company. “If the quality of car assembly, the design and positioning of the brand as a whole does not change, then the consumer does not even think about who owns the brand,” Eremenko shared his opinion with Gazeta.Ru. “The purchase of Volvo by the Chinese is just such a case, so this circumstance did not affect the demand on the part of Russian buyers”.
Volvo is not the only example. On the account of the Chinese - the purchase by Dongfeng Motor Group of 14% of the shares of the French concern PSA, which is going through difficult times, the acquisition of BAIC from Saab technologies. One cannot but recall the failed deal to sell the Hummer brand to the Chinese. In addition, it recently became known that the Chinese state-owned chemical corporation ChemChina plans to acquire the Pirelli tire brand for 7.1 billion euros.
But the same tactic is used not only by the Chinese. For several years now, the Indian has owned the British Jaguar Land Rover and is doing everything not to be associated with the legendary premium brand among ordinary buyers.
The Swedish car company Volvo is now owned by the Chinese carmaker Geely. The agreement to buy the famous automobile brand from the American giant Ford was signed on Sunday. The deal amounted to almost two billion dollars.
1.8 billion dollars - this is the price of companies that produce passenger cars under one of the most famous European brands. For the Swedes, this is unlikely to be a blow to national pride, because this is not the first time Volvo has been sold. In 1999, the enterprise became part of the Ford Corporation, and it cost the Americans 3.5 times more than the Chinese - 6.5 billion dollars. The crisis forced to dump excess assets - one of them was the Swedish mark.
“The main goal of the deal is to find a new owner who shares Ford’s vision of Volvo’s future. We needed to find a new owner who can develop the business while taking special care of the unique features of the Swedish brand. And who also treats employees responsibly. the company and the community in which we work. We have found, and I am pleased to report this, such an owner in the person of Geely, "said Lewis Booth, vice president of Ford.
It took some time to find it. They talked about plans to sell Volvo back in 2008, but there was no buyer. Negotiations lasted almost two years, in the end, the Chinese promised to preserve the Swedish image of the car company as much as possible.
"Volvo will be managed by Volvo's management. The company will be granted independence from a strategic perspective. It will operate according to its own business plan. We are committed to maintaining the brand identity and regard Volvo as a Swedish company with a strong Scandinavian tradition," says Li Shufu. chairman of Geely.
Leaders do not have to pack their bags - the headquarters remains in Gothenburg. At first glance, according to the results of the deal, Volvo will not decrease, but will increase. Factories in Sweden and Belgium will continue to assemble cars, but production in China will join them.
Geely's plans are not ambitious enough, they are simply grandiose. Now the Swedish manufacturer assembles about 300 thousand cars a year - a new plant in China should do the same. And this is only the Volvo brand - the total production of the concern will be in the millions.
"We set a goal to achieve production of two million vehicles per year by 2015. This is the strategic plan of Geely. Our strongest positions are in Russia and Ukraine. In Ukraine, in particular, we have deployed the assembly of one of our company's models," says Zhang Nenger , a Geely employee.
The acquisition of a well-known brand raises the prestige of the Chinese car industry. Volvo will open a more expensive segment of the European market to manufacturers from the Middle Kingdom, its sales network. The Chinese even managed to persuade the union, at first it was categorically against the deal. But after lengthy discussions, the unionists changed their anger to mercy. As they themselves explain, after familiarizing themselves with Geely's financial plans.
“I believe the company has the strength and the opportunity to grow and I have a positive view of the future. Geely is able to make Volvo a profitable business again,” says Søren Karlson, head of the local Volvo Workers Union.
In Sweden, Volvo works 16 thousand people, another six thousand work outside the kingdom. The head of the company Li Shufu personally persuaded the union leaders. But now, after the signing, the suppliers of components are nervous, their technologies will become available to the Chinese, which means, perhaps, you can not explain. Auto experts can only speculate what is better - the future under the Chinese flag or the curtailment of production, as is the case with the no less legendary Hummer brand. Indeed, after the breakdown of the deal with representatives of the Chinese car industry, General Motors decided to say goodbye to this brand altogether.
The Volvo concern, which has shown itself as a manufacturer of high-quality and reliable equipment, is one of the most influential representatives in Europe, in particular in the premium segment. It has several factories specializing in the production of different vehicles. The XC90 model for Russia is assembled in Sweden and Belgium. Chinese-built vehicles are sold in the Asian market.
Between 2000 and 2007, the Swedish brand did not develop much, offering customers older models with a limited range of engines. The next year was decisive for the company and served as a starting point for its further successful development. This is due to the conclusion of an alliance with the Chinese Geely. In fact, the Chinese bought the Swedish company, but the agreement still looks like a merger.
The Chinese manufacturer committed itself not to change the name of the Volvo brand, to leave Sweden as the country of the manufacturer, and also not to use the Swedes' developments for the Gelly models.
In which countries are Volvo cars assembled?
There is a misconception that Volvo cars are assembled in Norway, Switzerland and even Germany. In fact, the brand's main European manufacturing facilities are located in the Swedish city of Torslanda, as well as the Belgian city of Ghent.
Until 2013, an enterprise in Uddevalla operated in Sweden, where the C70 model was produced. There are no other Volvo car assembly plants in Europe. In China, the assembly of Swedish cars is organized at a plant in Chengdu.
After the merger with the Chinese Geely, production volumes in Gothenburg did not decrease, but even increased. This was facilitated by significant Chinese investment.
Pros of merging:
- Serious investments made it possible to develop new cars, technologies and expand the brand's model range.
- Allowed to exchange experience with designers from Geely.
- For Volvo, the Chinese market opened up, where its products were exempted from duties.
- The staff of the enterprise has expanded, production lines have been updated and automated.
Second generation Volvo XC90
The company originally planned to release the new XC90 in 2009-2010, but due to the merger with Geely, the timing was postponed.
The world debut of the model took place in 2014, and the serial one at the plant in Gothenburg. The first cars were delivered to their customers in the spring of 2015. On the occasion of the brand's birthday, the Swedes have released a special version called First Edition with a circulation of 1927 units.
The cars were sold out in 47 hours.
In 2016, the model was awarded the North American SUV award. The winner is determined by a commission of independent journalists. The previous version of the car experienced a similar success in 2003. In addition, the crossover performed the best in its class according to Euro Ncap.
Volvo Personvagnar AB is a Swedish car manufacturer specializing in the production of passenger cars and crossovers. Since 2010, it has been a subsidiary of the Chinese company Geely Automobile (holding Zhejiang Geely). The headquarters is located in Gothenburg (Sweden). Interestingly, the very word Volvo in Latin means "I roll."
Assar Gabrielson and Gustav Larson were at the origin of the founding of the Swedish car manufacturer. A chance encounter with college classmates in 1924 led to the formation of an automobile company under the wing of bearing manufacturer SKF.
The first Volvo ÖV4 (Jacob) drove out of the factory gates on the island of Hisingen in Gothenburg in April 1927. The car had an open top of the phaeton type, was equipped with a gasoline four-cylinder engine (28 hp) and could accelerate to 90 km / h. This was followed by the new Volvo PV4 sedan, and a year later the Volvo Special - an extended version of the sedan. In the first year, only 297 cars were sold, but in 1929, already 1383 Volvo cars found their buyers.
Even the first cars of the Swedish company were distinguished by progressive technical stuffing and rich interior equipment. Suspended leather seats, wooden front panel, ashtray, curtains on the windows, and all this at the end of the 20s of the last century.
The company develops and produces reliable cars, and its main strong point is safe cars. Let's note the brightest and most significant models for the Swedish manufacturer:
The PV650 was assembled in the years 1929-1937.
Volvo TR670 from 1930 to 1937.
PV 36 Carioca - 1935-1938.
The Volvo PV800 series was nicknamed "the pig" and was very popular with Swedish taxi drivers, produced from 1938 to 1958.
PV60 - 1946-1950.
The Volvo PV444 / 544, Sweden's first monocoque car, rolled off the assembly line between 1943 and 1966.
The Duett station wagon was produced from 1953 to 1969.
A unique and rare roadster P1900, only 58 cars were produced in 1956-1957 (according to some sources, 68).
The Volvo Amazon was produced in three body styles: coupe, sedan and station wagon from 1956 to 1970. The car was the first in the world to be equipped with front three-point seat belts.
The P1800 is one of the most beautiful sports coupes from Volvo, produced from 1961 to 1973.
Volvo 66 is a compact hatchback, produced in 1975-1980.
The 140 Series cars, produced from 1966 to 1974, open the modern history of the Swedish company Volvo.
The four-door sedan Volvo 164 represented Sweden in the luxury executive car segment from 1968 to 1975.
The next new Volvo cars in the form of 200 series cars won the love of motorists on both sides of the Atlantic Ocean due to their reliability and safety, cars were produced from 1974 to 1993 and were sold in more than 2.8 million copies. In Europe and North America, you can still find these models in fairly good condition.
The 300 Series are compact sedans and hatchbacks, produced from 1976 to 1991. They were replaced in 1987 by the Volvo 440 (hatchback) and 460 (sedan) models, production ceased in 1997.
One of the most striking and memorable cars in the history of the Volvo company was the three-door hatchback Volvo 480, produced from 1986 to 1995. The car was the first Volvo with front-wheel drive and the only one in the production line with retractable headlights.
The 700 series midsize sedans and station wagons were produced from 1982 to 1992. The cars sold around the world with a circulation of 1430 thousand units.
The 700 series was replaced in 1990 by the 900 series sedans. Cars were produced until 1998 and were able to repeat the result of the previous series of 1,430,000 cars sold.
The Volvo 850 sedans and station wagons appeared in the company's lineup in 1992. More than 1,360,000 vehicles were sold in over five years, production of the model was discontinued in 1997.
In the 21st century, the Scandinavian company offers a wide range of models. For each body type, Volvo offers its own letter designation: S - sedan, V - station wagon, C - coupe or convertible, XC - crossover.
The Swedish company Volvo is a leader in the global automotive industry in terms of the implementation of security systems used in passenger cars. Cars originally from Sweden are rightfully considered one of the safest in the global automotive market.
Volvo's auto assembly plants are scattered around the world, ranging from the main factories at Torslanda and Uddevalla (Sweden) to ancillary plants in Ghent (Belgium), Kuala Lumpur (Malaysia) and Chongqing (China).
The lineup in Russia is represented by Volvo С70, Volvo XC70, Volvo S80, Volvo XC90.
Volvo cars have always been associated with superior quality and unconditional reliability. But this was considered before, until the history of the company began to change dramatically.
At some point, everyone thought that the brand might disappear altogether. After returning to the market, it seemed that Volvo would never be the same again. There will not be the same quality, the same reliability indicators.
As it turned out, the worries and doubts were in vain. Currently, Volvo still continues to produce new cars that are distinguished by excellent assembly, rich equipment, fairly high prices and a thorough approach to.
At the same time, for many, the question remains about where exactly these cars are produced. This is explained by the sale and resale of the company's shares, the transfer of the brand from one hand to another. This, as expected, confused consumers. And when the concept of China sounds next to Volvo, it scares you away from buying the once-best Swedish cars.
An excursion into history
When it comes to the country of manufacture of Volvo, the first thing to remember is the homeland of the brand. Namely Sweden. Yes, the company originated in this particular country, and now there are several factories operating here. But Volvo's influence has expanded since its inception, allowing the assembly to branch out into production lines in several countries.
The company currently has several main lines of business:
- production of passenger cars;
- manufacturing of freight vehicles;
- supply of parts and spare parts;
- assembly and supply of engines;
- manufacturing of units for trucks, etc.
If we talk about trucks, then we are talking about an offshoot of the company, which is called Volvo Track Center and is based in Kaluga. In fact, this subsidiary has no direct relation to production.
But it all started with a relatively small Swedish factory in the city of Gothenburg. It was here in 1927 that the first car under the Volvo brand rolled off the assembly line.
For over 70 years Volvo has been an integral part of the Volvo Group. But in 1999 the brand was sold. At that time, he became the property of the American auto giant in the person. Although the Americans have not been able to retain the Swedish brand for a long time. This was due to the unprofitability and unprofitability of the further maintenance of the company. As a result, Ford management decided to get rid of Volvo by putting it up for sale.
After 11 years of ownership, Volvo was taken over by the Chinese carmaker Geely from Ford. It was a difficult period for the company, as low profitability, weak sales figures gave way to the transition to the beginning of the Chinese automaker, which at that time was not yet sufficiently recognizable. Everyone was afraid that this would lead to a drop in quality, a significant decrease in positions and a drop in Volvo's rating.
But in practice, everything turned out differently. Since 2010, when the Chinese bought out Volvo from the Americans, a period of formation and revival of the brand began. Geely managed to build a correct development strategy, invested money in Volvo, which fully paid off with the start of production of new and updated cars.
The new owners set a goal to radically change the model range, significantly increase production capacity, and globally strengthen Volvo's position in the world market. And they have been doing it successfully so far.
Now more than 2.3 thousand dealers, which are concentrated in 100 countries, are engaged in the sale of cars under the Volvo brand. By the end of last year, the total staff of the auto company around the world totaled over 38 thousand people.
During the same 2017, the company managed to sell almost 600 thousand of its cars of different classes and segments. Moreover, it turned out to be 4 years in a row, when Volvo shows sales records. The results of 2018 promise to be no less successful, but the results of the annual report have not yet been summed up.
As for the financial component, the operating profit for the last year amounted to 14 million kroons against 11 million in 2016. Annual revenues reached 210 million kroons, although a year earlier this figure was at that time a record 180 million.
The main headquarters is located in the homeland of the brand, that is, in Sweden, in the city of Gothenburg. It is also here that the company develops its products, carries out marketing operations and planning, and also deals with administrative processes. And in 2011 we opened 2 offices in China. They are more focused on working in the domestic market. The Chinese headquarters took over the functions of sales, marketing, purchasing and development, as well as some other support functions.
Car manufacturing
Since buyers are interested in where the Volvo CX90, CX60 and a number of other cars are assembled, a more detailed understanding of the brand's production geography is required.
Initially, all Volvo cars were produced in Sweden. But then the production was taken up in other countries. At the same time, the plant in Gothenburg, originally producing Swedish cars, is still the main enterprise, where models such as XC90, V60, S80, etc. are now successfully assembled.
To understand where Volvo is produced and assembled for Russia and other countries, you should study the geography of the automaker.
I would like to immediately notice that cars are sold in Europe that are focused specifically on the European market. Asian and American assembly lines are concentrated in the USA and Asian countries, respectively. The exception is the plant in Chengdu, which is located in China. The enterprise was opened here in 2013. It assembles cars, which are subsequently sold directly at home, that is, in China, and also sent for sale in the United States.
Another Chinese plant has been operating since 2014. It is located in the city of Daqing. A little later, a plant was opened in Luqiao. The most recent Volvo assembly plant is the Charleston plant located in South Carolina, USA.
Volvo for Russia
It is worthwhile to understand in more detail where cars are assembled under the Volvo brand for Russia. It is a mistake to think that the process of assembling Volvo cars, which are intended for the Russian market, is established in China. Cars assembled in Sweden or Belgium go to Russia.
To find out exactly where the same Volvo XC90 or another model officially presented in Russia is assembled, you should look at. If the VIN code uses signs 1 or J, then the car was assembled in Sweden. If you see the number 2 on the wine code, then the car is assembled in Belgium, the city of Ghent.
So far, only at the level of rumors is the appearance of a plant in Russia expected. If this happens, the most likely option is to organize an assembly line. That is, the components will be supplied, and the final assembly will be undertaken by domestic enterprises. This scheme is practiced with many imported cars, so Volvo can become one of them.
In the meantime, you should count on cars supplied from Europe. Objectively, there is nothing wrong with this, since the European assembly is of high quality and accuracy. Whether the domestic specialists will be able to adhere to the same level, if rumors about the appearance of Volvo in Russia become reality, the question is urgent and open.
To summarize and determine where the various Volvo cars such as the XC90, XC60 and other popular models are assembled, it is worth considering the entire current geography of the brand.
- Gothenburg. This city is the main springboard for the Swedish brand, since it is here that the headquarters of the company is located. Plus, one of the most productive factories operates in Gothenburg. Every year, a large number of machines leave the assembly line and are distributed around the world for subsequent sale. Among them is Russia;
- Skövde. Currently, this enterprise, located near Gothenburg, is engaged in the production of power plants. Volvo stands out for its reliable and efficient engines, which have won numerous prestigious awards. This is all the merit of the specialists working in the Swedish Skövde;
- Copenhagen. Volvo also has offices in Denmark. There is a research and development center here. That is, they are invented here, introduced into production, tested and modernized;
- Olofström. A Swedish city renowned for its high quality Volvo bodywork components;
- Ghent. One of the main production facilities of the Volvo brand is located in Belgium. The full production cycle is carried out here. In terms of build quality, the specialists from Ghent are considered the best in their field. Indeed, the machines coming off the assembly line in Belgium are distinguished by an excellent fit of all parts. This is not to say that other plants are much worse in this component. But for some reason it is generally accepted that the best Volvo cars are made in Gothenburg and Ghent;
- Silicon Valley. Another research and development center. Located in the American Silicon Valley;
- Charleston. The newest enterprise where a full cycle of production of Volvo cars is carried out. The plant opened in 2018 will help meet American demand for Swedish cars. Volvo has always been popular in the North American market, but previously the cars had to be supplied from other continents. Geely's solution will largely solve the problem of long-term vehicle delivery to end-users;
- Daqing. A relatively new plant operating in the Chinese city of Daqing. It appeared after the acquisition of the Volvo brand by Geely. The cars assembled here are mainly focused on the local market. The enterprise has been operating since 2014;
- Zhangjiakou. Also the Chinese city, where the production of power plants for the entire line of Volvo cars is concentrated;
- Luqiao. A plant in China, which is engaged in a full cycle of production of cars of the Swedish brand;
- Chengdu. At the moment, this is the last among the presented Chinese factories, where the production of cars of several models from Volvo has been established. The enterprise started serial production in 2013;
- Kuala Lumpur. This is Malaysia, where the Chinese from Geely organized an assembly plant that deals with Volvo cars. All the necessary components are supplied here, and the Malaysians only collect everything together;
Bangalore. Another assembly plant in India. Thus, representatives of the Chinese concern Geely are trying to expand their own influence, as well as meet the demand in the emerging market for reliable Volvo cars. As in the Malaysian Kuala Lumpur, in Bangalore they only assemble from ready-made components.
You can clearly see that the Volvo brand has expanded from several continents and a number of countries at once. The USA, Europe and Asia have their own factories, research centers, assembly lines.
Not everyone expected that after the sale to the Americans and the subsequent sinking of the Volvo brand, the transfer into the hands of Chinese owners would have such a positive effect on the development of the company.
But Volvo has really managed to regain its former position. Moreover, many experts are sure that now the brand is only at the initial stages of its formation after its once probable disappearance. Everything is going well, sales are growing, new models are emerging and great updates to already proven Volvo car models.
The opening of an enterprise, even in the form of an assembly plant, in Russia will be another big step for Volvo. There is a fairly high demand among Russians for cars of this brand.
It is worth remembering that not so long ago there were meetings between representatives of Russia and Volvo. The result of negotiations of the contact group with the plant in Kaliningrad was a trial run of the assembly line for Volvo cars. As a result, 8 station wagons were assembled, which are produced under the name XC70. But after that, it was not possible to agree on cooperation. This is just the first attempt. Negotiations should resume soon. The probability of signing a contract between the parties is quite high.
We must not forget about the impressive achievement in the form of the opening of the Volvo Track Center in Kaluga. Although the assembly of Volvo trucks is not directly related to the production of passenger cars, Russians still have experience of cooperation with representatives of the Swedish brand. In addition, excellent trucks are assembled in Kaluga, the quality of which has no complaints. This fully meets the needs of the domestic market. Also from Kaluga, assembled Volvo trucks are delivered to the neighboring countries of the CIS and the Baltic states.
Despite the rather high price, advanced technology, excellent build quality, reliable engines and advanced safety systems, in many ways justify the overpriced.
