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Oh no!
http://money.cnn.com/2009/10/28/news/companies/volvo_sale_china/index.htm?postversion=2009102810
Maybe time to cancel my V50 order :(
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Thanks for all of the good comments!
My concern isn't for the actual quality of the car that I have on order, it's looking 2-3+ years down the road. Will parts and service be available? Will resale value take a beating? I hate to make broad, sweeping generalized statements but many chinese goods have a poor reputation for quality. If a lot of potential Volvo owners freak out (like me) and choose to buy a different product then it will be difficult to keep the brand going. Then again, China is an up and coming power and may soon own all of the car manufacturers!
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First off, resale on new cars is terrible - you're going to lose 10-15% in the first year.
Second, resale on Volvo's is generally not great, as some other posters have stated. They just don't have the draw/cachet that beamers and benzs do, and they don't have the (sometimes undeserved) quality rep that japanese stuff does (among the general populous - you and I both know they're plenty durable!)
Third, it's been speculated for over a year that they would be sold. It doesn't seem to have affected their sales thus far, which were not stellar since the downturn started but not terrible either (on the whole - they had terrible months to be sure).
As I said before, in the even that Geely or another Chinese company does buy Volvo you would end up ultimately dealing with them for parts and service and warranty - but I'm not sure you'd notice in the end. They'll still be manufacturing their parts in Sweden and Germany (mostly) for the near term. I guess I can envision a day when a Chinese owner would want to take advantage of China's manufacturing power and build many parts there, esp anything plastic or electronic... but that's WAY off in the future. I could see that a Chinese owner might want some cars like the new S80 for the growing lux market in China - so maybe they'll start manufacturing China-spec cars there eventually too. Actually they already manufacture a long wheelbase version in China!
http://en.wikipedia.org/wiki/Volvo_S80
As far as 'generally' how would a Chinese buyer affect Volvo, I'm of two minds.
On the one hand I think Volvo could really benefit from having lots of money and that 'startup' attitude where profits aren't the be-all-end-all. They are at the heart a research company - though a pragmatic one like Apple or Nintendo. It would be nice to let the engineers have a little more reins and see what happens.
That said on the other hand I think the public perception of the company as a whole could suffer greatly in the western world, where there is already negative sentiment towards China's pervasiveness in our stores. (Ex: there is an Atlantic Canadian company (Highliner) selling frozen/IQF salmon in the grocery stores that actually comes from CHINA! HELLO! There are plenty of salmon in Atlantic Canada! anyway - that's the end of that rant...) What with all the poisonous paint on children's toys and poisonous pet food and the precarious quality of the metal parts like tools etc... I think there could be a major backlash in people's minds and they could simply stop buying Volvos offhand...
But you never know right?
To be honest I think they'll be fine no matter what happens. They still make one of the best wagons in the world, and sell it in NA where it can be hard to find a good wagon. And apart from the nav system their tech is first rate. I think they'll be fine.
--
1998 V70 AWD Turbo 195k+
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I'm torn at this point. I can cancel the contract and pay a 10% penalty or go ahead and hope for the best. I polled my co-workers today and the response was 100% that they would never buy a chinese car. Too bad the chinese have such a reputation for poor quality. I strongly suspect that if this deal goes through, resale values will plunge by about 50%. Thanks a lot Ford.
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The Chinese will not build your car. Just as Ford doesn't make Volvos either, unless you think the Tarus SHO is a rebadged S80 :)
Klaus
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Proud owner of a 220S. If I had more room, I would have more Volvos.
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As an aside one of the things holding this merger up is Ford trying to wring a promise out of the Chinese that they will protect Ford's manufacturing and design secrets. I don't it's a big surprise that it would be a bone of contention. I was in China 10 years ago and the amount of Microsoft pirated software was staggering. I think Ford wants to wring more than a verbal promise from the Chinese. In fact, the entire deal could come unraveled because of this very issue. This is NOT a done deal.
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Don't freak out too much cat3.
You're not buying a Chinese car at all - you're buying a car that was engineered by Ford and Mazda and Volvo engineers in Cologne Germany, designed in Gothenburg Sweden, and built in Ghent Belgium.
Even if Geely does become Volvo's owner it will never make your car Chinese.
That said you may be looking at dealing with a Chinese owned/run company for support/service in the future. It's certainly nice to think they won't interfere wtih Volvo too much...
Every said "the sky is falling" when Ford bought Volvo too.
I admit that this is substantially different than the Ford deal (Volvo would be going to a brand new car company rather than a seasoned one). Nonetheless, if Geely has money and leaves Volvo to it's own devices I think they'll be fine, maybe even better in the long run.
I actually was a big fan of the platform sharing with Ford and Mazda, but now that Mazda is already mostly out of the picture, I don't think Volvo would miss Ford all that much, except for maybe providing the funding for the tech pet projects (like cross-town traffic) that Ford will also want to use - the research money might dry up a bit.
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"I strongly suspect that if this deal goes through, resale values will plunge by about 50%. Thanks a lot Ford."
Yeah...if you want a good resale value, go for something German or Japanese. The new VW's are nice, the Audi's even nicer =). Volvos have a crummy resale value as it is anyway...I'm just gonna run mine into the ground and then keep it as a 2nd car in a few years. I love my Volvo, but I'm doubtful that I'll ever buy one of the newer ones, especially if this goes through.
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Before everyone gets all riled about Beijing, please remember that Ford did not produce Volvo they merely owned it. Volvo was not affected but Ford got the benefit of Volvo engineering and platforms while Volvo got the benefit of Ford's money. I can't imagine that we will see a Chinese produced Volvo at least for several years.
By(buy?) all means continue in your transaction. There is nothing new that could possibly affect your purchase or the fine automobile that is being produced for you.
As for a valuation of a used car there are 2 sides to that coin. I just recently purchased an 02 S60 NA for my son to use while in college. I got it for $6000 and only 73K on the odometer. I couldn't touch a BMW, Honda or Toyota for that money and mileage. You get more for your money when purchasing a Volvo. Most of us don't anticipate turning a car over every 2 years anyway. A bit ago I looked at BMW 5 series cars and came close to buying one when I realized that I had owned a 97 S90 that was a bigger car, with a bigger motor, ran on unleaded gas as opposed to premium and was newer. Instead of the 500 series I was better off simply looking for another nice S90 instead of a 12 year old BMW at substantially more cost. In fact, I looked at a 97 S90 before buying the 02 S60. It had 73K miles on it and the guy wanted $4500. It needed $1500 worth of repairs on it but you couldn't touch a 97 BMW 525 or thereabouts for that kind of money, mileage and fit and finish.
The long and the short of it is don't let the news sway you from finishing the purchase of your car. It has nothing to do with your transaction and the quality of the car you're buying. As they say, "bid with confidence".
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According to some influential auto journalists the new Jaguar is one of the best in decades.
This was measured not just in terms of styling but also the abundance of cutting edge technologies, interior materials, fit and finish and restoration of its essential "Englishness."
It all depends on what Geely intends to do with the company. If they are as careful as Tata has been with its heritage brand, then it probably is a win for both Volvo and Geely.
Geely gets an upscale brand and Volvo gets access to an enormous market.
The Chinese cars I saw at the NAIAS in Detroit seem like the Toyotas of the '70s.
Lexus anyone?
Bryan
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BTW I wouldn't be too surprised if this deal falls through.
Ford shares a LOT of platform tech with Volvo. I have even read some journalists claiming tech to be invented by Ford and lent out to Volvo when I suspect it was actually the other way around (specifically I'm talking about their new Cross-Town Traffic tech - which is awesome - and Volvo's Blind Spot (BLIS) warning system).
Also the IP issues in China are dicey...
Ford wants the cash but they want to A)not lose any IP protection B)continue sharing platform tech for the short term C)see Volvo be healthy and compete globally in the long term.
Hopefully they find a way to do all those things. I personally would like them to retain a small stake, like 15% or something, so as to continue sharing...
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Sigh, it's such a shame GM & Ford bought out Saab & Volvo who were successful companies on their own for years, only to destroy their reputations for quality, and then sell them off again to the highest bidder a few years later when they flop because they can't sell anyone their own cars. Half the replacement parts you find anymore for anything anymore are Chinese and total junk and just break again in half the time the originals lasted. The coil packs on my dad's Jeep (along with who knows what else) are Chinese, and he's already had 2 of them stop working in less than 50,000 miles. You'd think the companies would have learned something about quality from buying them out instead of just forcing their 'build em to last a couple years' policies on them. (Chrysler, too, with their stake in Damiler). GM even killed off Saturn after looking to sell them, which while I would never buy one, was one of their better-selling brands today.
/end rant
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Saab and Volvo, classic Detroit buy high, sell low
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I do my best to avoid spare car parts from the Chinese manufacturers, too. Now why did Fiat buy Chrysler? What can they possibly get from that partnership? It baffles me.
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Why did Fiat buy Chrysler?
a ready-made dealer network to sell their cars, distribute their cars and parts, disseminate their support/tech info, etc. It takes a long time and a lot of money to build up a proper dealer network. If Fiat was looking to sell cars in NA they were going to need this stuff eventually, so they bought a turn-key dealer network and had the car-company thrown in for good measure. As a bit of a bonus they get a decent RWD large car platform to sell in Europe.
Whether this will turn out to be successful or not is another story completely, but I think what they did does make some sense.
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Too bad every Chrysler dealer I've ever been to has been THE WORST of ANY manufacturer. Maybe Fiat can help them fix that. *fingers crossed* Their parts & service departments are full of idiots & the willingness to fix as little as possible (I can't say much more for Crown Volvo, though...probably why they went out of business!). It took us 4 separate visits to get them to fix the sliding door on my mom's old Town & Country minivan that wouldn't open from the inside, not to mention something else was wrong with it like every 3 months and we'd sometimes have a loaner car (usually a Neon or something awful) for days, only to come back to discover they hadn't even looked at our car. She later bought an Acura SUV, which probably is the best dealer I have ever been to hands-down, and she was never happier, and she traded up for an Accord from the same dealer when all of us "kids" went off to college. My dad traded the minivan for his Jeep, only because of a loyalty bonus on the trade-in, on which he has done most of the maintenance himself and avoided the dealer completely since owning.
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As to replacement parts quality, you should ask those parts importors/dealers of how much they have paid for them. And what's the profit margin for them and those Chinese makers. You'll be surprised.
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