Visitors view Volvo cars during the 37th Thailand International Motor Expo 2020 in Bangkok, Thailand, Dec. 13, 2020. The 37th Thailand International Motor Expo 2020 closed on Sunday. About 31 car makers and 20 motorcycle makers attended the 12-day expo held from Dec. 2 to 13. (Xinhua/Zhang Keren)

 
Volvo Cars, the Swedish automaker which is owned by China's Zhejiang Geely Holding Group Co, is reportedly finishing plans for an initial public offering (IPO) that could value the carmaker at $25 billion, a huge jump from its value 10 years ago when it was sold by Ford Motor for only $1.8 billion.

Robust sales in Chinese and European markets in 2020 and this year have helped Volvo to rake in a growing stream of revenues.

Details of the Volvo listing will be announced as early as Monday, according to a report from the Wall Street Journal, citing people familiar with the matter.

A listing, if it goes ahead, would represent one of the car industry's "most dramatic turnarounds." US Ford Motor Co, weakened by the 2008-09 global financial crisis, sold the Swedish company to Geely for $1.8 billion in 2010.

"This is one of the most successful mergers in the auto industry across the world within the recent 10 to 20 years, and there's no doubt Geely is a good investor," Feng Shiming, a car analyst with Menutor Consulting, told the Global Times on Monday.

According to Feng, Geely has not only invested strongly into the then struggling Swedish automaker, but has also "feed it back" with localized new technology and appliance so that it could rapidly distinguish itself from other competitors and take a firm foothold in the competitive auto market.

Over the course of a decade, Geely invested more than $11 billion, financing a modernization of the company's model line-up, an early shift into electric vehicles, and factories in China that helped Volvo cash in on Chinese middle class consumers' surging appetite for Volvo vehicles.

The firm is also profitable and is quickly stepping out of the shadow of the epidemic. In the first six months this year, Volvo has made a profit of 13.24 billion Swedish crowns ($1.52 billion), more than double its profit of 5.52 billion crowns made in the same period of 2019, before the coronavirus struck. 

Volvo was heavily affected at the start of the pandemic, plunging to a 989 million loss in the first half of 2020. 

Feng predicted that Volvo will use the money raised from the IPO to better serve its upcoming fully-electric strategy.

The Gothenburg-based firm has vowed to become a fully electric car maker by 2030, sell 600,000 electric vehicles by mid-decade, and build a European battery gigafactory in 2026.

"The future of car industry lies in each individual automaker's performance in the new energy sector," Feng said.

Global Times