htmlOn November 8, Volvo Cars (hereinafter referred to as Volvo ) issued an announcement stating that in order to achieve electrification by 2030, Volvo will divest 33% shares of Aurobay, a joint venture of Geely Holdings , to Geely Holdings, thereby completely withdrawing from participating in the development and manufacturing of internal combustion engine , which also makes Volvo the world's first auto manufacturer to completely withdraw from the development and manufacturing of internal combustion engines.
Today, let’s take a look at the cooperation history between Volvo and Geely .
At the end of March 2010, Li Shufu expressed Geely's thoughts on technological coordination at the "Media Meeting on the Signing of the Agreement on the Volvo Car Company of Geely".
He analyzed that: "Volvo is not enough in scale compared with Mercedes-Benz and BMW , but I guess its R&D investment is similar to that of Mercedes-Benz and BMW, so it has formed a large amount of intellectual property rights and formed a large number of technologies. Because the relatively small scale is relatively high, the cost of each car is relatively high, so it loses money. Therefore, we must find a way to fully utilize these technologies and expand sales of these products. Only by expanding the scale can the cost of each car be reduced, and the profit of will appear."
's words mean that Geely's understanding of the coordination between the two parties has reached the level of asset nature - Volvo has the advantages of brand, technology and intellectual property rights, while Geely has the advantage of advantages and the scale space for collaborative production. The assets of both parties have obvious complementarity characteristics and huge potential for cooperation.
Geely has made sufficient technical coordination preparations, and everything is ready but the east wind is not available. Li Shufu couldn't wait to release Volvo's vitality through technological collaboration, but it was not someone else who blocked the arrival of Dongfeng , but the CEO Stephen Jacob, who was once recognized by Li Shufu. Jacob insists that Geely and Volvo have no coordinated foundation. On the one hand, he responds to Geely's coordinated proposals in a "inaction" way, while looking for potential collaborators around the world who can collaborate with Volvo in technology. However, at that time, large auto manufacturers around the world generally had concerns about Volvo's intellectual property ownership, and Jacob's plan to seek external coordination was disappointed.
However, Jacob's negative attitude did not dispel Li Shufu's enthusiasm. In order to eliminate the concerns of board members, Li Shufu actively planned the "Senior Executive China Tour" project and invited every director to visit China in person to let them further understand Geely's latest products and technology system. Board member Hanken Samuelson is a member of the China Tour. Born in Sweden in 1951, Samuelson is a truck expert and served as chairman and CEO of the German Mann Group. Known as a "cost killer", he also served as a director of China National Heavy Duty Truck Corporation in Hong Kong, my country, and has a good understanding of the Chinese market.
In Hangzhou, Samuelson and his party were invited to visit Geely Automobile Research Institute - the largest automobile technology development institution among domestic private automobile companies at that time.
Anconghui showed Samuelson the relevant data of Geely's latest model Embrance EC718 during the reception. Samuelson noticed that in the list of suppliers of the car, some familiar names are listed: the world's second largest automobile technology supplier German Bosch , the world's first seat interior manufacturer, the world's largest sunroof Netherlands , the world's largest steel maker, South Korea Posco iron , the world's best mold maker Fuji...
At the same time, the Emgrand EC718 is equipped with 1.8-liter Geely's own CVVTh[1] all-aluminum engine , and the flagship model also adds ESP active safety system and Geely's world's first BMBS tire blowout monitoring and control system.
Various data show that within the price range of around 100,000 yuan, Geely not only balances the power performance with environmental protection and energy conservation well, but also shows positive attention to safety performance.
Geely's commonalities with Volvo's technical concepts left a deep impression on Samuelson. Although the market positioning is different from Volvo, Geely demonstrates its cost control and market perception capabilities.
Geely’s candid communication ultimately touched the Volvo Board of Directors. After that, Volvo's board of directors passed the proposal for joint development between the two parties. In November 2011, the "Volvo-Gely Dialogue and Cooperation Committee" was established, and Geely and Volvo began to enter a new stage of technological collaboration.
In 2012, Geely and Volvo will put the joint development of the new body architecture platform CMA on the agenda.
In February 2013, led by Volvo, Geely and Volvo jointly established Geely Automobile European R&D Center (CEVT) in Gothenburg to build a new CMA infrastructure platform. This modular platform can meet the common product development needs of Volvo and Geely.
In this process, the R&D teams of both parties jointly developed the platform and shared, digested and absorbed the technology accumulation on the platform.
CEVT after its official establishment in Gothenburg, Sweden. In terms of organizational structure, CEVT is ranked alongside Volvo Cars and Geely Cars , and is also owned by the parent company Geely Holdings. When the R&D center was under construction, there were only 7 people, and now there are nearly 2,000 people, bringing together top automotive engineers from more than 20 countries around the world. [2] In the R&D center, Geely and Volvo established a one-on-one working relationship - Volvo sent a senior person to pair with a young man sent from Geely, and in every key R&D field, this is arranged in this way. The establishment of
CEVT marks the implementation of technical coordination between the two parties. CEVT is a technology integration R&D sharing platform for Geely and Volvo to achieve maximum resource optimization allocation, and can be side by side with Geely Automobile Research Institute, which can be called Geely's heart. The functions of CEVT involve Geely's future strategic layout and all aspects of R&D platform construction, including a complete set of systems such as special basic theoretical research on automobiles, common modular infrastructure and core components development, vehicle verification and testing, vehicle body and model appearance design, vehicle procurement, etc.
1.5TD engine is a new generation engine jointly developed by Geely and Volvo. Its performance indicators are outstanding among high-end brands and similar products, and it is compatible with future electrification and intelligence. Currently, it is equipped with the entire series of Lynk & Co models and some Geely Automobile models, and is produced in Geely Baoji, Guiyang, and Yiwu engine factories. Second, in the future, CEVT will play a more important synergy role and provide support for the strong cooperation between Geely and Volvo.
Secondly, the new era high-end car brand Lynk & Co, a joint venture between Geely Holding Group, Geely Automobile Group and Volvo Cars, integrates European technology, European design, global manufacturing, and global sales, and is established based on the CMA infrastructure platform led by Volvo and jointly developed by Geely and Volvo.
The two cooperations gradually led to a deep integration between Geely and Volvo.
acquisition and integration is a long process. There is no doubt that Geely is gradually gaining recognition from Volvo within it, but whenever Geely tries to advance the cooperation between the two sides to the technical level, opposition will arise. Compared with Geely's ambitions, many Volvo directors are cautious about the coordination between the two parties, believing that from brands to products, Geely and Volvo have no basis for technical cooperation.
In October 2016, as a major achievement of the technology collaboration between Geely and Volvo, the new brand LynkCO (LYNKCO) was launched.
As of 2019, Lynk & Co has launched a total of Lynk & Co 01, Lynk & Co 02, Lynk & Co 03, Lynk & Co 03+ and other models covering the SUV and sedan fields. Zhu Ling, deputy director of the Lynk & Co Brand Research Institute, said: "Lynk & Co is born with considerations to promote the integration of both parties. CMA architecture is to inherit and integrate Volvo's technology. It is not just about learning information, but about everyone developing a platform together to share and absorb technology accumulation on the platform. This itself is an opportunity for the integration of both parties and complementing each other's advantages." Volvo Cars CEO Samuelson also said: "The establishment of a new brand is a model for Geely Auto and Volvo Cars to achieve a win-win situation."
, two teams from different countries and growing up under different cultural backgrounds, are not easy to integrate and do things.
The cooperation between Geely and Volvo is full of conflicts and twists and turns.Both teams have different styles in terms of design and manufacturing concepts and methods of doing things. In the early stages of cooperation, the two sides did not recognize each other and disputes often arise. For example, the European design team reversely designed the antenna on the roof of Lynk & Co., and when the Chinese development team got this shape, they wanted to change it; there was a diaphragm product, and the European team designed the atomization effect instead of the transparent effect. The Chinese team did not understand such a design at first, which also caused controversy.
However, this dispute and conflict created an opportunity for the integration of both teams. The Chinese team believes that running in a quarrel is actually a process of slowly accumulating trust. The European team used "creative friction", which means there was creative friction, to describe this state. For example, in the chassis tuning of Lynk & Co 02, the teams of both sides also had different opinions. The European team initially used European road conditions as the standard, and the adjustment results performed well. However, the road conditions in China are different, such as more speed bumps, which will affect the driving experience of the vehicle. After realizing this problem, the European team changed their habits. The Chinese team intervened and after conducting road conditions in China, they carried out chassis adjustments, parts changes, etc., and came up with solutions to cooperate with the European team to implement them.
Therefore, after the launch of Lynk & Co 02, the customer driving experience has been much optimized. Such cooperation means that both sides are facing conflicts and differences with a positive attitude and working together to find solutions. After full communication, the Chinese team has a deeper understanding of European design and the European team has a deeper understanding of Chinese manufacturing. Zhu Ling said: "Only everyone is in pain can truly understand the way of cooperation."
During the running-in process, both sides are also learning from each other. When developing Lynk & Co 01, it was the European designer team who led the Chinese team to complete the work. When Lynk & Co stage 02, the two teams worked together. After the Chinese team grew up slowly, they took over the task of Lynk & Co 03, responsible for more vehicle development, testing and other tasks. The teams of both sides jointly adjusted the front McPherson suspension and the rear multi-link independent suspension. At this time, the cooperation between the two parties is more like a team working, rather than a negotiation between two different teams as before.
In order to deepen the understanding of the Chinese team and the Chinese market, the European team actively learns. For European designers, they are naturally good at Nordic styles. But when facing Chinese consumers, they need to break out of their comfort zone, understand the understanding of fashion and personality of young Chinese urban people, find the feeling of urban trends, and then cleverly integrate Chinese and Western cultures.
Therefore, designers integrate Chinese and Western cultural conflicts, team conflicts, and consumer personality conflicts, and concentrate on Lynk & Co products. The brand takes the design concept of "urban opposition aesthetics", integrates the strength of the European design team, the China-Europe joint engineering research and development team, and the global parts procurement team, and finally completes production and manufacturing in China. It can be imagined that the chemical effects stimulated by different teams, different countries and different cultures throughout the process are quite strong and interesting. Specifically, the unique opposing aesthetics are reflected in the overall color matching, lamp body design, body shape, interior decoration design, and car logo design.
In fact, from the perspective of organizational integration, Lynk & Co's birth carries the consideration of the integration of both parties. In terms of market positioning, Volvo is a luxury brand, while Geely is a mass brand. There is actually a lot of market space between the two. Especially in the Chinese market, the mainstream joint venture car companies lack a high-end brand. In addition, both Geely and Volvo want to make more innovations. Therefore, the Lynk & Co brand is a new brand created by combining the brand positioning and demands of both parties after the two parties reached a technical cooperation intention and established CEVT. It is born for integration. In the process of integration, the two sides complement each other's advantages. The first-class European design team combines China's strong manufacturing capabilities; the engineering team is the joint force of both sides, and in an open ecological environment, they will give full play to the advantages of both sides to the extreme. As a result, Geely has obtained better technology and products, while Volvo has a cost advantage.
After they achieved deep integration, the "cultural barrier" between Geely and Volvo was gradually eliminated, realizing the deep integration between Geely and Volvo. In fact, at the beginning of Geely's acquisition of Volvo, few people were optimistic about this "transnational marriage" between Geely and Volvo. If you look closely, both sides have a big difference in their growth environment, value concepts or style of conduct, and they don’t look very “very compatible”. The differences between them are rooted in the national cultural environment they live in.
In the history of international mergers and acquisitions, there are many cases of failure due to cultural cracks. In 1998, the largest industrial company in Europe at that time, Daimler-Benz , and the third largest automobile manufacturer in the United States, "strongly joined forces" to carry out the largest merger and acquisition case in the history of the world's automobile industry so far. However, this pair of "a combination of heaven" was apart in the ninth year of joining forces and went their separate ways. Later, in the analysis and research of this classic case by a number of media scholars, failure of cultural integration was always highlighted.
Learn from history. Geely’s approach to cultural integration is not only wise and stable, but also in line with the general trend of international mergers and acquisitions. Judging from the subsequent results, in the early stage of the integration, this cultural inclusive concept of "Gely is Geely, Volvo is Volvo" not only eliminated the opposition between the two sides to the greatest extent, but also allowed Geely and Li Shufu to gain the favor and recognition of Volvo people in a short period of time. All of the above are an important part of the successful integration of Geely and Volvo.
Under the premise of respect, understanding and tolerance, Geely has never given up on the in-depth cultural integration between Volvo and Geely. Through the holding of a series of activities such as "Geely Day", Zhejiang (Geely) Symphony Orchestra European Tour, Volvo Global Sailing Race and other activities, the cultural integration between Geely and Volvo has begun to show results. The journey of cultural integration among enterprises is long and full of hardships and challenges. In Geely's conception, in the future, Geely and Volvo will downplay their respective national backgrounds and regional cultures and form a global culture that is compatible with the times and the company itself.
On November 8, 2022, Volvo Cars issued an announcement stating that in order to achieve electrification by 2030, Volvo will divest 33% of the shares of Aurobay, a joint venture of Geely Holdings, to Geely Holdings, and thus completely withdraw from participating in the development and manufacturing of internal combustion engines, which also makes Volvo the world's first auto manufacturer to completely withdraw from the development and manufacturing of internal combustion engines.
This announcement is based on the needs of market development, and is in line with the development of the times and leads the trend of the times. Based on the global corporate culture concept of "each is beautiful, the beauty of beauty, and the beauty is shared", and integrating the advantageous resources of both parties, Geely and Volvo have achieved technological integration, cultural integration and talent integration. Geely not only revived the global luxury car brand, but also achieved Geely Auto's leapfrog development - becoming a leader in Chinese brand cars. It can be said that Geely and Volvo have created a new model of integrated development.
