Another Automaker Merger Is About To Happen

Industry News / Comments

It's the sign of the times.

The global auto industry is changing rapidly due to a number of rising new technologies. Developing those technologies is anything but cheap and it makes better business sense to seek partnerships and, potentially, mergers. The Ford-Volkswagen partnership and the pending FCA-PSA merger are two main examples.

But today, another merger appears to be happening. Volvo Cars and its parent company, Geely Automobile Holdings, are considering a plan to combine their businesses "to create a strong global group." Doing so would "accelerate financial and technological synergies" between the two. Nothing is officially set in stone just yet but given that this information comes directly from Volvo, the chances of a deal happening very soon is likely.

2018-2020 Volvo XC60 SUV Three Quarter Front Left Dynamic Volvo
2017-2020 Volvo V90 Cross Country Three Quarter Front Left Volvo
2019-2020 Volvo S60 Front View Volvo

"A combination of the two companies would result in a strong global group. We look forward to working with Hakan Samuelsson, president and CEO of Volvo Cars, to further investigate this opportunity with the goal to strengthen the synergies within the Group while maintaining the competitive advantage and the integrity of each individual brand," said Li Shufu, Chairman of Geely Holding Group.

The two automakers are already working on joint projects. For example, the Volvo XC40 rides on the Compact Modular Architecture (CMA), a platform jointly developed by Volvo and Geely. This highly flexible platform can also be used for all-electric vehicles, such as the Volvo XC40 Recharge and Polestar 2.

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Volvo
2019-2020 Volvo XC40 Three Quarter Front Right Volvo
2019-2020 Volvo XC40 Left Side Profile Dynamic Volvo
2019-2020 Volvo XC40 Three Quarter Rear Right Volvo

The relationship between Volvo and Geely has produced excellent results. If you recall, Geely bought Volvo from Ford back in 2010 and has since successfully managed to revive the Swedish luxury brand. Many industry analysts were surprised Geely wanted Volvo in the first place, but the results speak for themselves. If the Geely-Volvo merger proceeds, the transaction would be carried out in compliance with the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong.

No time frame was provided as to when this could happen, but we wouldn't be surprised to hear an official announcement as soon as next month at Geneva.

2019-2020 Volvo XC40 Front Interior View Volvo
Front View Volvo
Rear Angle View Volvo
2020 Polestar Polestar 2 Side View Polestar
2020 Polestar Polestar 2 Front Angle View Polestar

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