Podcast
Questions and Answers
What was the first car that Volvo built in 1927?
What was the first car that Volvo built in 1927?
Which company did Volvo sell its car manufacturing part to in 1999?
Which company did Volvo sell its car manufacturing part to in 1999?
What major challenge did Geely face when acquiring Volvo?
What major challenge did Geely face when acquiring Volvo?
What percentage of Volvo's total sales volume were electric cars in 2021?
What percentage of Volvo's total sales volume were electric cars in 2021?
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How many cars did Volvo sell worldwide in 2019?
How many cars did Volvo sell worldwide in 2019?
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What was a notable feature of early Volvo models?
What was a notable feature of early Volvo models?
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Why did Ford sell Volvo Cars to Geely in 2010?
Why did Ford sell Volvo Cars to Geely in 2010?
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What was the sales prediction for Volvo cars in China reported by Geely?
What was the sales prediction for Volvo cars in China reported by Geely?
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Study Notes
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.
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Description
Explore the fascinating history of Volvo, founded in 1924 by Assar Gabrielsson and Gustav Larson. Discover how they designed their first car, Jacob, to withstand harsh Swedish conditions and the evolution of Volvo into a renowned manufacturer of cars, buses, and heavy machinery.
