Geely-Volvo deal a new chapter for Chinese companies

• Source: Xinhua
• [18:02 March 30 2010]
• Comments

The largest Chinese private car maker not only acquired 100 percent of Volvo Cars and related assets, but also gained access to the brand's core technology and patents. It also landed the company's existing global sales channels.

It is likely to give the Chinese auto industry a big leap in terms of technology and research and development, which is a milestone for the development of all Chinese enterprises.

Usually it takes time for a company to grow and establish a reputation worldwide, particularly in a mature global market. Such an overseas acquistion could be a shortcut for a company in an emerging market, including China, to build a global presence at a relatively low cost.

Nonetheless, signing a deal is only the first step. Integration is the key for a Chinese company to run an overseas brand.

It's been five years since Lenovo, China's largest PC maker, bought US computer giant IBM's PC unit. It's still not clear whether Lenovo's cash was worth the effort.

To bring the marriage to an happy ending, Geely's boss Li Shufu needs to figure out how to make good use of Volvo's brand and technology, as well as the transformation of the corporate culture and management.

At least, Geely has got a good start for both itself and the Chinese market. We will wait and see if other Chinese companies achieve more successful Volvo-style deals in the days to come.