Blog: Chinese firms can create jobs outside China
Dave Leggett | 22 June 2010
Ford's divestment of its Volvo Cars unit to Geely of China has yet to be completed and there will undoubtedly be some who would rather it isn't and that Ford will therefore be forced to reconsider the sale.
We'll see. But one interesting aspect of Ford's strategy to sell its brands is the 'carry-over' issues that arise from heavy product development integration across Ford's former premium brands. That was at the heart of the PAG strategy of a few years' back. Share as much as you can with engineering architecture and major components but do that in a manner that does not impair brand differentiation.
Pretty much the entire Volvo range uses Ford platforms and under the terms of the sale to Geely, Ford said it would continue to supply powertrains and platforms to Volvo for an unspecified time.
You can imagine there might be intellectual property concerns in selling to a Chinese maker, so the details of future supply arrangements might be taking a while to work out. And Geely also has to get its finance in place (USD1.8bn) - which it sounds confident about.
The challenge for Geely is to get the right product development infrastructure in place for the next generation of Volvo models. Giving a high degree of autonomy to Gothenburg might be a good way to go. This deal could yet be very good for Volvo Cars in the long-term.
We heard last week how SAIC is maintaining an MG design centre in the UK and the story provides an interesting counterpoint to the previous extremely negative publicity of the wholesale 'lifting and shifting' of tooling and everything else from the UK to China after MG Rover hit the buffers and was purchased by Nanjing Auto back in 2005 (Nanjing was subsequently acquired by SAIC).
Chinese companies that want to operate on the international stage are perhaps becoming a little more sophisticated than many in this industry give them credit for. And that will surely be a growing trend over the next five years as the bigger Chinese groups seek out more international sales growth and improved designs and technologies.
I'm starting to get a small idea of the scale of things here in China, but really, I'm only scratching the surface of this vast country....
Given the startling complexity of obtaining a journalist visa for China - the code 'J2' is now indelibly stamped on my mind - it was with some surprise how swiftly I managed to sail through airport im...