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China represents the largest market for new cars on the planet, and the Chinese are buying new vehicles at an increasingly fast pace, so you can understand why manufacturers are continually positioning their products to satisfy the needs of Chinese consumers.
In the past, American automakers like Buick have seen success in the Asian market, however now Scandinavian marque Volvo looks poised to rake in profits thanks to a new lineup rich with technology and safety features.
Volvo has done so well in China that they expect to double their annual profit, which is good news for Geely Automobile Holdings Ltd., the company that owns Volvo.
Volvo in China
In 2016, net income at Geely was 5.11 billion yuan, or approximately $782 million. In their exchange filing for 2017, the company claimed that they would exceed the 9.46 billion-yuan average produced by a panel of Bloomberg analysts.
Many viewed Geely’s acquisition of Volvo from Ford in 2010 as a mistake, but with a hit new line of cars, the move has proved anything but that. Thanks to an all-four-cylinder engine lineup that provides excellent fuel economy, sleek styling and of course, extensive safety features like automatic braking, lane-departure warnings and high-tech safety glass in windshields, Volvo cars have seen lots of success in China.
Reinforcing Heavy Vehicle Development
Being a Chinese company, Geely has skillfully guided Volvo product development in a direction that meets the needs of the ever-expanding Chinese market well, and now they are looking to the future.
You might not know it from their passenger cars, but Volvo is a top global producer of heavy vehicles such as trucks used for commercial shipping. Geely, however, only owned a controlling share of the Volvo passenger car company until recently.
To double-down on their wins in China and globally, Geely has purchased shares in truckmaker Volvo AB. It’s aggressive, and a wise move as high-tech self-driving trucks stand poised to inherit many commercial shipping jobs. Look out, Uber and Tesla, there’s a new player in the truck market now.