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New Volvo Cars owner Geely wants the Swedish carmaker best known for safety to build cars that compete with top BMW and Mercedes sedans, its founder and chairman has said.

In an interview with Reuters after the US$1.5bn purchase from Ford closed, Geely’s Li Shufu said he sought to boost Volvo’s profile in China and step up research and development while a modest sales increase would be enough to tip the company back into profit. The closing of the takeover by Zhejiang Geely, parent of the Hong Kong-listed Geely Automobile, was China’s biggest acquisition of a foreign carmaker.

“We want to make more high-level cars that compete with the [Mercedes S class] and [BMW 7 series]. We need products to compete in that segment,” Li said.

These models cost close to double the price of Volvo’s top S80 sedan.

“If Volvo can sell 380,000 units every year, the business will be profitable, but in order to get an upper hand in the competition we need a dramatic increase in volume (above that),” Li told Reuters. Volvo sold nearly 335,000 cars last year and lost $653m.

also Li said no decision had yet been taken on where to locate a new Volvo plant in China, and that would require market studies and board and government approval.

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By GlobalData

Geely plans to boost Chinese awareness of Volvo’s heritage of developing features such as air bags and catalytic converters but the high specificity and cost of Volvo parts means few will be used in Geely-branded cars, and Geely will not seek to sell those cars in Europe or the United States.

Li told Reuters financial distress would eventually spark consolidation in China’s vast but fragmented car market.

“I hope everybody will lead a good life, but there’s a market economy, competition — it’s very natural for some companies to go bankrupt,” he said.