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Why Volvo Owners Shouldn't Fear Geely

Monday, 29 Mar 2010 | 10:20 AM ET

Ever since Ford first started negotiating the sale of Volvo to Chinese automaker Geely, I've received a steady number of e-mails from Volvo owners calling this a sad development for their beloved brand.

AP

While some people are more torn up about it than others, the basic complaint is the Chinese will gut the Swedish automaker and turn Volvo into a company that cranks out substandard cars in China.

I wouldn't be worried if I were a Volvo owner. Yes, Geely bought Volvo because there is enormous potential to grow the brand in China, but there are reasons the Chinese wanted this brand.

First, Volvo buys Geely instant, credible access to the U.S., the most lucrative auto market in the world. But Geely executives know that access won't be worth much if they gut Volvo's hallowed reputation for engineering and safety.

This is why Geely CEO Li Shufu made it a point on Sunday to say Volvo's management and key decisions will be staying at the company's headquarters in Sweden. The Chinese know Volvo's top brass know Volvo better than anyone else, so those executives will stay in charge of the brand. For U.S. fans of Volvo this means the brand will not change dramatically, at least not in the foreseeable future.

In many ways, the dread over Geely buying Volvo is similar to the hand wringing we heard when Ford bought Volvo. I remember getting e-mails from Volvo fans back then saying nobody would buy the Swedish brand with Ford as the owner. That never happened. Somehow, I think we'll see the same thing with Geely in the driver seat of Volvo.

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  • Phil LeBeau is a CNBC auto and airline industry reporter based in the Chicago bureau and editor of the Behind the Wheel section on CNBC.com.

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