By Steve Kelman

Blog archive

The Chinese and Volvo

I am in the business class lounge at the airport in Frankfurt, Germany, on a seven-hour layover flying from Boston to Riyadh, Saudi Arabia, where I will be attending a public administration conference. (Among others, John Kamensky and Jonathan Breul from the IBM Center for the Business of Government, along with David Osborne, author of "Reinventing Government," will also be there.) Particularly attentive readers of this blog may remember that this lounge is filled with newspapers from all over Europe, so this is my chance to look at French, German, British and Swedish papers during these copious layovers -- they have good snacks too, including a Thai curry soup I am about to try after finishing this post.

At any rate, there was a small story on the business pages of the U.S. media on Thursday that was, unsurprisingly, a huge story in the Swedish press (four full pages plus an editorial in Dagens Industri, Sweden's counterpart to The Wall Street Journal), about the likelihood that Volvo, the Swedish carmaker that Ford now owns, will be sold to Chinese automaker Geely.

This is a huge story for Sweden because Volvo is a Swedish national icon and one of the largest companies, and employers, in Sweden. And it is an interesting story for me personally, given my interest in both Sweden and China.

But it is an important story for the rest of the world as well. This represents the first significant purchase by a Chinese company of an important Western consumer brand. Volvo is a well-known, if niche, brand even in the U.S. and certainly in Europe. This is another sign of China coming of age in the world economy.

Geely is the largest privately- and Chinese-owned auto producer in China. (There are a number of foreign producers and foreign joint ventures with Chinese government-owned firms.) Geely was founded by a private entrepreneur, who is quoted in Dagens Industri as saying he sees Volvo as "a beautiful, mystical woman" -- an interesting metaphor that says something about what this sale means for China. The company has promised to keep Volvo headquarters in Sweden, and Swedish commentary notes that this has to be good for Volvo sales in China, now becoming the largest car market in the world. "Time To Get Used To Volvo Becoming Chinese" is the headline of the editorial on the topic in Dagens Industri.

Posted by Steve Kelman on Oct 30, 2009 at 12:08 PM


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