Volvo had lost its way under Ford ownership. While still having a reputation for making solid and safe cars, it had become, well, pretty boring. There was nothing in its range as cool as The Saint’s P1800 of years before. That all changed with new owners Geely, and in a big way.
Ford, of course, ran out of cash and off loaded loss making Volvo in 2010 to the Chinese fridge maker turned auto assembler Geely in the wake of the financial crisis for just $1.8bn (having previously paid $6.45bn for Volvo back in 1999).
What a bargain that turned out to be.
Volvo was by no means a basket case but it was loss making and needed a backer with deep pockets. Geely offered that and – moreover - a management style that suited Volvo well. It was a great fit for Volvo and it’s doubtful any other car firm could have offered this mix.
A high degree of trust has characterised the relationship between Geely and Volvo. Put simply, Geely doesn’t micromanage, and allows Volvo bosses to get on with it.
That has enabled Volvo to regain its ‘mojo’. It has thrived by combining Swedish design with speed of change, and has looked outside and to the future.
Geely, headed by Li Shufu, has invested heavily in new models, manufacturing and technology including self-driving cars, where Volvo is a pioneer.
This is now paying off in financial performance (although it still needs to push its profit margins higher).
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Geely’s ownership has also allowed Volvo to reposition itself as a premium brand and has produced some of the best received new cars of recent years.
These have included the XC90, 60 and 40 SUVs, through which the firm has focused on winning market share in this highly profitable and fast growing segment of the market.
The company’s push into self-driving technology - which includes tie ups with Uber and Autoliv - could also enable Volvo to shape the evolution of the industry if its autonomous driving systems become the industry standard; these could be licensed to provide a major revenue stream going forward.
Volvo is pushing into ride-hailing services as a way of testing such autonomous systems, for example by agreeing to sell Uber as many as 24,000 cars.
Such tie-ups allow Volvo the scope to run on more of an ‘open innovation’ model where it shares ideas with others and could offer a way of competing with much bigger players in developing autonomous technologies going forward.
It also keeps development costs down by running its models off two ‘scalable’ platforms and competing in a limited number of segments. The platforms can be sized for different models and are modular in nature, so can be traditional petrol, hybrid of electric. Volvo is dropping diesels.
It still needs to grow, however. Last year it sold just short of 600,000 cars and is aiming to double that by 2025, by which time it is aiming for a third of its cars to have autonomous technology and 50% of sales to be electric.
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The latter seems quite a stretch.
The new plant in South Carolina in the US completes its desire to have bases across the big global markets of China, Europe, and North America, enabling it to grow sales further.
In unveiling its new S60 (which resembles a scaled-down S90) in the US , the firm will have brought out nine new models since 2012, effectively replacing its entire range.
Looking forward, profitability can also be boosted by sharing Volvo technology across Geely auto brands: think of Geely, Lynk & Co, Polestar, the London Electric Vehicle Company (which makes the new electric black cab near Coventry) and maybe Lotus.
There’s much speculation that Volvo could be floated, but Mr Li is thought to want a $30bn market valuation, and seems more than happy to hang on to it if that isn’t forthcoming.
Professor David Bailey works at the Aston Business School