Although Volvo was established in 1927 as early as possible, but its development process is not smooth sailing. Volvo is the largest manufacturing company in Sweden Volvo's passenger car sector, in 1999 by the United States Ford acquisition, Volvo main body to retain the commercial vehicles, construction machinery and engine sector, since then, although the use of Volvo brand, But embarked on a different path.
Since the acquisition of Volvo in 2010, the $ 100 billion acquisition of Volvo, so that the frail century brand to achieve the first phase of the revival, and gradually restored strength. Benefited from Geely's support for Volvo, Volvo in the design, research and development, marketing and other fields, have a qualitative fly. By 2015, Volvo's models in the global total sales ever exceeded 500,000 mark, and from 2014 to achieve a continuous profitability. 2016, Volvo global cumulative sales of 534332 units, compared to 2015, it is growing 6.2%, which is the Volvo brand for three consecutive years to refresh sales records. As of the end of February, Volvo 2017 cumulative sales of 71990, an increase of 5.4%. Among them, the largest increase in sales in China, up to 20.8%.
The development trend is getting better and better, independent listing also seems to become more and more logical. At first glance, last year's $ 500 million in financing led to a 100% stake in Geely diluted, but this is not what the story of the farmer and the snake, thanks to the value of SEK 7.5 billion investment plan, Volvo launched a new XC90 And SUVXC60, as well as a costly but flexible new car platform. Volvo is currently working with Geely to create a new can be used by both sides of the small car production platform, some of which investment funds from the Bank of China to provide loans.
Although Volvo executives claim that "not bad money", but for Geely, in the development process, the financial difficulties have been go hand in hand. That year, if there is no Goldman Sachs to 330 million US dollars stake, Geely will not have the acquisition of Volvo won the trust of the chips. After the acquisition of Volvo in the past few years, Geely flowers, but a lot of money, only 2016 Geely Volvo invested nearly 20 billion yuan, the new platform, new factories, new technology research and development, are money. Plate too much, put too much, if the listing means more than a fixed financing channels, to have more money to come in, of course, will also ease the pressure of auspicious. Geely has paid so much for Volvo, and perhaps do not mind more people to continue to support the development of Volvo.
Or a win-win situation
Now, whether it is Geely or Volvo, in the sales and reputation have made a double harvest, then why Geely also "sell" Volvo it? It can be seen, today, in the Volvo technology sharing platform, auspicious learn the school also learned, Geely also help Volvo re-embarked on the mainstream, be successful to take what, and Geely and Volvo together to build Two platforms: SPA and CMA, also seen the prototype.
Last year, is in the brand's rise of Geely released the flagship in the high-end market sub-brand LYNK & CO, and this year will launch the first production version of the model. At the same time, LYNK & CO 01 also has a large number of common parts and Volvo. The future, LYNK & CO may be able to and Volvo in the luxury car market bayonce see red may also. In this way, Geely Volvo hundred percent of the holdings will not have much meaning.
Volvo is now through the rich means of financing, reduce the financial layer of geely dependence, to a certain extent, reduce the auspicious funds "burden", so that Geely to hand to build a new brand. Although in the 22nd, Geely Automobile (HK.00175) announced the full 2016 annual results show that in 2016 Geely Automobile operating income of 53.72 billion yuan, the Group's total cash level (bank balances and cash + mortgage bank deposits) in the 2016 end of the year growth of 63.8%, reaching 15.08 billion yuan, although the book seems auspicious cash flow sufficient, but Geely on LYNK & CO investment will reach 20 billion yuan giant. This is a short-term need for huge investment and the payback period is too long project, in the next 5 years, the brand will consume tens of millions of dollars of financial resources. Perhaps the financing of Volvo's listing can indeed solve some of the financial problems Geely, whether it is the last to sell it or only sell equity.
However, some analysts pointed out that the cooperation between Geely and Volvo R & D cooperation in the initial stage, Geely's own high-end brands have just released, and now sell will certainly affect cooperation; Moreover, Volvo is now profitable business, is no longer 1.8 billion The dollar will be able to buy, and even Geely want to sell, there are not many buyers at present.
In Li Shufu's plan, 2020 will be auspicious into the world's top ten car key years, and support the dream come true behind, will inevitably need a steady stream of funds to support. Volvo's financing listing, or in the future will be sold to Volvo, Geely can be a way to solve the problem of funding. However, in the industry analysts believe that the new shareholders between the run-in, before the listing of the ownership structure design, and even the choice of listing location, both Chinese and foreign shareholders may be disagreement, which will make the prospect of Volvo listed become confusing.
In any case, for Volvo and the entire Geely Group, Volvo independent listing or will be a win-win thing. On the one hand Volvo independent listing will raise more funds, on the other hand, for the Geely Group, even if the Volvo independent listing makes its shares diluted, but the degree of dilution is not too great, the future Geely Group will remain Volvo The largest shareholder. And Volvo through independent listing to raise more development funds, will also be reduced to a certain extent, Geely Group, the financial pressure.
