Long time ago, when a company wants to expand, it could only look at going to other towns and cities. Today, when companies think about expansion, it’s more often to be regionally or even globally. This is why it’s now possible to become super huge very fast. Sorry, I am talking about real businesses with real profits and not some start-ups (over 5 years or more) with continuous push for higher market share via subsidizing from its deep pocketed shareholders yeah. Let’s look at the owner of Volvo cars, shall we?
Li Shufu is the owner of Zhejiang Geely Holding Group.In 2010, it completed the acquisition of Volvo from Ford Motors. In 2019, Volvo sold over 700,000 cars and this was the first time ever that it has managed to achieve this after 93 of establishment. In brief, the ‘marriage’ between Geely and Volvo has been extremely successful. In 2017, Geely acquired Proton. At the end of 2019, Proton has managed to sell 100,000 cars and is back into the black. In brief, this merger has also been successful.
Article in theedgemarkets.com Geely owns Volvo, Lotus cars, London’s iconic black cabs and a stake in Daimler AG (Yes, nearly one tenth ownership of the producer of Mercedes cars…). Now, it has emerged as a potential investor in Aston Martin and there was also a proposal for a jaguar Land Rover potential tie-up.
The owner of Geely Zhejiang Holdings Group Li Shufu was able to revive Volvo because he gave the Swedish manufacturer’s engineering team the resources to invest in new models. At the same time, he helped to lower Volvo’s high costs by jointly developing vehicle underpinnings with Geely. Here’s a history of what has been Geely’s acquisitions since 2006.
| Year | Investment |
| 2006 | Buys 19.97% stake in Manganese Bronze, maker of London taxis |
| 2010 | Acquires Volvo Car from Ford Motor |
| 2013 | Gets 100% control of Manganese Bronze |
| 2017 | Acquires 49.9% of Malaysian automaker Proton and 51% of Lotus |
| 2017 | Takes over flying car company Terrafugia |
| 2017 | Purchases 8.2% stake in Volvo AB from Cevian Capital |
| 2018 | Acquires 9.69% of Daimler AG |
This was what Li said recently, “The historical trend of economic globalization is irreversible,” Li said in a speech earlier this month. Geely should “work together with international partners” to “seize the technological commanding point through collaboration and sharing.” Please do read a very comprehensive Article in theedgemarkets.com
There are definitely acquisitions which went the wrong way yeah. However, what Geely has demonstrated is this. When you are able to grow and you are profitable, it’s possible to use the profits to invest into other businesses which will bring a better value to the group as a whole. Plus, the merger and acquisition will also be successful when the new owner is also able to show that it wants to grow together with the company it acquired. This gains support from all stakeholders.
This is why when we earn a good monthly salary, the only way to grow our wealth is by investing the savings and not to spend everything yeah. Identifying the right investment vehicle instead of a new car (pun intended) to invest is essential. When the investment returns are added together to the growing monthly salary, the person may actually start to have more wealth than even his managers or seniors.
Same action all the time equals to the same result all the time! In the corporate world (rat race world), if everyone is to rely on just that few percent increments every year of course the one earning the highest salary would be the most senior staff in the whole department yeah…. How much is the increment in 2020? Here’s that article. Happy driving a new Volvo (for the richer ones) and well, Proton (for working professionals).
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