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Volvo Technology to be used in creating new car model for Chinese GeelyFriday, 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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