Opinion
Green leapfrog crucial to Geely's future
(China Daily)
Updated: 2010-08-04 14:44
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The completion of Geely's buyout of the Volvo car brand from Ford Motor Co Monday is certainly a time to rejoice considering that this may be regarded as a pivotal moment in the global car industry's center of gravity shifting from the West to China.
This is definitely the largest ever takeover of a foreign carmaker by a Chinese company, and Geely is now well positioned to transform its leap of imagination into a real business feat.
Hopeful as it may be, however, the combination of a European luxury car brand famous for safety and quality with a fast-growing Chinese automaker excelling in tapping the world's largest auto market in itself does not guarantee future success.
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During the first six months of this year, Volvo sold 15,497 cars in China, up 88 percent over last year - that contrasts sharply with its 5.2 percent and 9 percent year-on-year decline in sales in major markets like the US and Germany.
Yet, the far more demanding task for Geely will be to transition from a cost-efficient domestic carmaker to a multinational auto giant that will hope to eventually remodel itself into a leading green carmaker.
China has steadily embraced fuel-efficient and clean-energy cars over the years. If any automaker tries to excel only in being a top supplier of traditional cars, it will suffer sooner or later from its myopia. The success of Geely's ownership of a big luxury brand may therefore hinge on whether it can actually make that great green leap.