For domestic automakers who have an appetite for taking over foreign auto elites that fall from grace, Geely’s purchase of Volvo Cars in 2010 is a case in point for overseas mergers. Such an old story means, of course, nothing more than a brilliance that deserves your admiration and is truly inspiring to homegrown automakers. 

It is well known that after the take-over of Volvo, the Geely Group persists in a localized management mode to avoid the possible incompatibility of these two car companies with competing automobile cultures. After the take-over, Geely Automobile and Volvo remained independent operation separately. 

This doesn’t mean that these two have nothing to share. On September 13, Geely’s European R&D center, co-established by Geely Holding Group and Volvo Cars, commenced its operation.

It is learned that the center is located in Goteborg, Sweden, which is supported with complete facilities and abundant resources necessary for car R&D and engineering production. Moreover, this center in Lindholmen Science Park has recruited nearly a hundred research staffs from Volvo and Geely and still wants more excellent personnel from outside. It is expected that a full strength team of 200 engineers can be achieved at the second half of next year.  

An Conghui, President of Geely Holding Group remarked at the operation opening ceremony that, “after the center comes into service, the Group will invest heavily in R&D activities and daily operation annually.” Though we have no clue how much Geely has allocated for the center, it is sure that the company desires more returns since it dares and inclines to invest so much. 

Dictated by Geely, the R&D center is designed to pool the technical capacity around the world, integrate resources superiority and build technology R&D system and talent team of international standard so as to acquire sustainable innovation capability and preserve the core competitiveness of the Group. Furthermore, An Conghui sets a clear goal for R&D activities that the European R&D center will allow Geely and Volvo to complement each other, create the world-class modular architecture for C-segment cars and lay a solid technical foundation for the advent of next-generation car models.    

We all know that the modular design enjoys the benefits of developing various product platforms on the same architecture while different car types can be derived from the same platform. Therefore, the successful development of modular architectures for C-segment cars could provide reasonable solutions to both Geely and Volvo. As a result, the reputation and development of one brand will not necessarily come from the cost of the other. The overall plan that Volvo aims at luxury cars and Geely at popular cars will be better implemented.

Under the control of the same parent, the Geely and Volvo brothers lead the development of modular architectures for C-segment cars jointly. Such a practice not only avoids the possible concessions and compromises arising from cooperating with outside business partners but also retains the core technology within the Geely Holding Group; hence the overall technological competitiveness and scale advantage can be ensured. Undoubtedly, this is a win-win result for both Geely Automobile and Volvo Cars.  

Geely is quite good at the calculation of input and output. More importantly, based on the new modular architecture, Geely is able to improve the quality and performance of its future products. Volvo could push back the boundaries of advanced technology with the capital of the Group; meanwhile, it can select excellent suppliers from Geely’s support system in Asia in order to improve the parts purchase system and form a healthier cost structure.    
　　
It is no wonder why Mats Fägerhag, Executive Vice President of Geely Automobile Research Institute and CEO of Geely’s European R&D center, who once served in Volvo Trucks, Saab Automobile and Volvo Cars, responded confidently when talking about the establishment and operation of the center. “This will be a paragon for cooperation between Western luxury auto brands and Chinese emerging auto brands”, he said. 

Whether such a cooperation mode could become the paragon in the auto field hinges on the actual operation status of the center in the future as well as the completion of modular architecture for C-segment cars on schedule. It may take a while before all this can happen. Nevertheless, the brilliant minds and methods of Geely are truly revealing to homegrown brands.