Haejin Lee Jay Jeong Kai Ou Fernando Moreno

Executive Summary
Geely () Meaning of Lucky or Good fortune in Mandarin Chinese Founded in 1986 by current chairman, Li Shufu Started as a refrigerator-maker Entered into the car market in 1997 Acquired well-known Swedish auto company Volvo in 2008 Currently one of the top ten automobile manufactures in China

International Expansion Strategy

Past Improve image of Chinese Auto-maker International Expansion by acquiring Volvo Present Achievement and Current Challenges Future Going Out Strategy Chinese Market as Core Market Developing New Markets

Negative Reputation
Tarnished the image of Chinese automobile Had reputation for being of extremely poor quality CNAP test showed pillar was extremely weak Scored zero star (Automotive Review)

Efforts to Improve
Make technological breakthroughs in the areas of Safety Quality Control Energy efficiency Environment friendly
Took quality control seriously Acquisition of Volvo

Revenue Comparison (USD)

$8,000,000,000 $7,000,000,000 $6,000,000,000

$5,000,000,000
$4,000,000,000 $3,000,000,000 $2,000,000,000 $1,000,000,000 $0

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Volvo

Geely

Volvo Acquisition ($$)

Geely paid Ford 1.8 billion $1.6 billion for a 100% equity stake $200 million for a credit note Raised $900 million to keep Volvo running Total = $2.7 billion

Fund of the Acquisition

Geely secured $2.1 billions of loans from 1. 2. 3. 4. 5. Bank of China China Construction Bank Export-Import Bank of China Geely Automobile Holdings Government of Gothenburg (Volvo HQ)

In Return? Geely promised to return Volvo, if Volvo would not make profits two years after acquisition

Volvo Financials
Sales Revenue (USD)
$7,000,000,000 $6,000,000,000 $5,000,000,000 $4,000,000,000 $3,000,000,000 $2,000,000,000 $1,000,000,000 $0

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Financials 2009
Geelys Profit before taxation: 224 Mill USD Net current assets: 1,476 Mill USD

Volvos loss in 2008: 1.5 billion Dollar Net Loss in 2009: 653 million Dollars

Acquisition cost for Volvo: 1.8 billion USD

Volvo Financials
January - June 2012 China USA EU20* Rest of World TOTAL 21,378 34,617 2013 Change 28,703 34.3% 32,578 -5.9%

123,279 109,783 -10.9% 42,035 38,054 -9.5%

221 309 209,118 -5.5%

*EU20 includes Sweden, Norway, Denmark, Finland, Netherlands, Belgium/Luxemburg, France, Spain, Italy, Greece, Portugal, UK, Irleand, Germany, Switzerland, Austria, Poland, Hungary and Czech Republic

Geely Financials
4.5 % of the Car Market share in China 95% Geelys sales come from China (2009)

Geelys Ambitions goals of growth by 2015:

Production Capacity (Millions) Market Share in China (%) % of Exports

GEELY Country
Culture Market

VOLVO Sweden-Democratic
Western culture (Open) Truly international : USA, England, Germany, Italy France, China, Spain and 45 other countries. Premium segment Luxury or nearly luxury brand over the whole world, famous for its safety record Very innovative in safety technology No growth during the last ten years Loss of 653 million USD

Country China-Communist
Asian culture (Conservative) Market 95% in China

Market segment Brand

Low cost and low quality segment Only known in China, low cost and low quality Very limited innovation due to the short history

Innovation

Growth, (up to 2009) High growth Finance, 2009 Profit of 188 million USD

Automobile Industry barriers to entry

Integration Challenges
About 80% of mergers and acquisitions (M&A) failures are caused by enterprise integration.

Technology Transfer Integration of personnel, institution and culture The impact of M&A on business relation-ships on customers and suppliers

Risk to erode Volvos brand

Keep Volvo Swedish

Acquisition Benefit
Promotion of Brand
Brand Awareness Technology Administration

Benefit of Advertisement
Snake Gulps an Elephant World Know about Geely

Future Development
Geely gets Volvos International Market Volvo gets Geelys Chinese Market

Geelys International Strategy

References
http://global.geely.com/general/CompanyProfile.html https://en.wikipedia.org/wiki/Geely http://auto.people.com.cn/GB/128665/210742/210744/13576746.html http://wenku.baidu.com/view/fc21ea4ac850ad02de804184.html http://www.ltbka.com/Html/c29/2011-04/2512.html http://www.nytimes.com/2010/08/03/business/global/03volvo.html?_r=0

http://www.businessweek.com/managing/content/apr2010/ca20100416_ 353527.htm
http://blogs.wsj.com/deals/2009/06/15/would-a-chinese-purchase-ofvolvo-help-china-or-hurt-the-car-maker/

References
http://www.businessweek.com/autos/autobeat/archives/2010/03/geely_ buys_volvo_believe_it_or_not_it_could_work.html http://www.chinadaily.com.cn/business/2010-3/29/content_9658301.htm

Questions?