VOLVO to develop new luxury model
Volvo’s new Chinese chairman wants to take the Swedish car brand upmarket and compete directly with BMW and Mercedes-Benz by building a large luxury saloon. Zhejiang Geely Holding Group on Monday closed its purchase of Volvo from Ford Motor for $1.5bn in the biggest overseas acquisition yet by a Chinese company of an overseas carmaker.
Li Shufu, chairman of Volvo and co-chair of Geely, said: “At the moment we are competing with BMW, Audi and Mercedes, but we don’t have a product to compete with the BMW 7-Series and Mercedes S-class. We need to fill that gap”.
Mr Li said Volvo had the technology plus the research and development capability needed to build a large luxury car and command higher prices for all its vehicles. He said: “In the Chinese market, people want luxury cars… luxury they see through their eyes and touch with their hands”.
Volvo sold 335,000 cars worldwide last year, fewer than any of the big German luxury brands.Volvo has been successful in China with an extended-wheelbase version of its S80 mid-size executive saloon, of which it expects to sell about 15,000 this year. However, it has no comparable large model like the S-class or 7-Series.