History of Volvo Cars

Volvo Origins

• Founded in 1924 by Assar Gabrielsson and Gustav Larson in Sweden.
• First car, named “Jacob,” was produced in 1927.
• Designed to endure rough Swedish roads and harsh winters, a defining feature of Volvo vehicles.

Early Development

• Initial reputation centered around safety, but early models faced issues, such as explosions due to engine placement near the gas tank.
• By 1945, Volvo gained international recognition but was considered too expensive for the average consumer.

Ownership Changes

• In 1999, Volvo's car manufacturing was sold to Ford Motor Company for $6.45 billion.
• Ford anticipated profits from the acquisition, which did not materialize, leading to a sale of Volvo Cars to Geely Automobile in 2010.

Geely Acquisition

• Geely, a Chinese company, purchased Volvo from Ford for $1.8 billion and invested an additional $900 million in production.
• Under Chinese regulations, the deal required both companies to operate jointly, allowing Geely to utilize Volvo’s technology.

Market Potential

• Geely aimed to tap into China’s automobile market, which accounted for 16 million car sales in 2010.
• Target sales for Volvo were set between 200,000 to 300,000 units annually, despite only 30,000 sold in 2009.

Challenges Faced

• Geely encountered management issues with a large company like Volvo, lacking necessary experience.
• Struggled to establish a global presence and manage costs without compromising quality.

Resurgence and Growth

• The investment and strategy proved successful; in 2019, Volvo sold 705,000 cars globally, a significant increase from 335,000 in 2009.
• Geely’s sales grew from 329,000 units in 2009 to 1,360,000 by 2019.

Focus on Electric Vehicles

• Geely and Volvo are collaborating on electric vehicles, which constituted 27% of Volvo's total sales volume in 2021.