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Volvo Keeps Doing This
Volvo Keeps Doing This-October 2024
2024-02-19 EST 22:12:46

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Volvo, founded 93 years ago in April, wobbled in the dying days of Ford’s ownership in 2010 before a surprising turnaround under Geely. These days, it is doing better than ever.

Volvo in South Carolina a year and a half ago, a sign of its expanding ambitions and a sign of how far it has already come from the days during the 2008 recession when Ford was so eager to unload it. It has gotten by on making well-built SUVs mostly, SUVs that rest just beneath those that Mercedes and BMW make in terms of price and luxury, but SUVs that don’t feel like they do. Volvo is, in other words, what Mazda thinks it is but isn’t.

All of which have rewarded Volvo handsomely. Its fourth-quarter and full-year earnings, reported Thursday, also reflected as much, .

The automaker, which China’s Geely acquired from Ford in 2010, said its operating earnings were 5.29 billion Swedish crowns ($551.7 million) as revenues rose 8.4 percent to 79.2 billion crowns ($8.3 billion).

Sales of Volvos rose nearly 10 percent in 2019 - with growth of 23 percent in the fourth quarter alone - as increases in China and the United States and strong demand for a line of crossovers, its best-selling models, gave a boost.

The interesting thing about Volvo is that it makes money by selling ... not a lot of cars, or at least not nearly as many as its rivals. It globally, or about a third of what BMW and Mercedes did. The biggest lesson from its revival is that if you buy a company that employs a bunch of smart people already doing good work, maybe leave them alone.

From :

As the most evolved piece of [Geely Chairman Li Shufu] vision, Volvo offers the clearest indication of how he might achieve it. “He gave us balls again,” says Lex Kerssemakers, a top Volvo executive under both Ford and Geely. “It’s not that they came with a bag of money; actually the opposite. The entire turnaround of Volvo has been financed by Volvo’s cash flow. They left us alone and had the patience as an investor not to take our money but to reinvest it in a new product portfolio. We were close to being dead in 2010. And here we are.”

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