Li Shufu, CEO of Zhejiang Geely Holding Group, appeared at the Geekpark Innovation Meeting at 798 Art Zone in Beijing. He described future cars as: smart lives with souls, not simply piles of steel.

Probably nobody would connect Li with 798 and Geekpark before, neither would they think Li was a geeker like Apple co-founder Steve Wozniak and Baidu founder Li Yanhong. However, if you knew him well, you wouldn't get surprised even if you put him into the scenarios of Big Bang.

"Wise with scientific spirits, eager for exploration and innovation, independent and adventurous……" these descriptions on geekers actually fit both Li and his Geely.

When Geely bought Volvo three years ago, Li said he must get Volvo out of loss and make it profitable within two years, which was questioned by many people.

You have to know that Volvo suffered continuous drops in its sales during the past 10 years with its market share constantly seized by competitors before the acquisition.

Volvo released its sales report of the third year after being acquired by Geely on January 9, 2014. It sold 428,000 cars globally, increasing 1.4 percent from the previous year; its sales in China also reached 61,000 units, a rise of 46 percent compared with the previous year; it also got bounces in the European market. 

Geely CFO Li Donghui told Talents Magazine that Volvo's profit in 2013 improved a lot although its total sales flatted last year. Its earnings before interest and tax (EBIT) during the three years were almost the same, but it didn't make money after tax for the first two years, and it got profits after tax in the third year.

In fact, temporary losses or profits didn't matter much for Li Shufu. He showed his ambition when he gave the special interview to Talents Magazine, namely, make Volvo go back to 1959.

Then what happened in 1959? In that year, Volvo was very ambitious. It made big success in tapping global market with model PV444, signing agreement with over 100 distributors in US alone; the most successful model of Amazon in its history was just launched; Torslanda factory was built on Swedish Hisingen Island, which was the largest and the most modern factory at that time; it designed three-point safety belt and made it open to the world free; Volvo was an absolute leader in the automobile industry at that time.

"I say I will make Volvo go back to 1959, and I mean I must make it more competitive rather than simply profitable. I won't tell it where to go, instead, it has to explore by itself. But now I see Volvo is moving forward as I expected, and it has done a good job." This may be what Li Shufu said: make it go back to 1959.

From the concepts "go back to 1959", "Geely is Geely, and Volvo is Volvo" put forward just after the acquisition to the establishment of joint research center in Gothenburg and the completion of Volvo localization layout, it can be seen that maybe Li Shufu already has his plans.

It is not hard for Volvo to gain profits at present although its sales is not so large, but it is hard to keep the brand of "being consistently profitable luxury-car maker" and become a leader again as it was in 1959.

As an example of China's private companies expanding in the world, Geely's purchase of Volvo is not simply a trade. It in a sense shows Chinese company leaders represented by Li Shufu have become more mature, and that also explains the growing of Chinese commerce and its integration with international business.

The saver's business

On December 2, 2013, British Prime Minister David Cameron posted a photo with Li Shufu on his Twitter after he visited China. He said that London taxi as Britain's iconic brand accompanied him since his childhood and he liked it very much. He took London taxi to Shanghai Ruijin Hotel and met with Li Shufu. After the meeting he said to the press: "I am very glad that Geely has invested 80 million pounds to its British business, and it not only increased the output of Coventry factory and built a new research center, but created 500 jobs for British people. Geely is a successful case that a Chinese company invests in a British famous company." 

Since 2009, Geely successively purchased the second largest transmission company DSI, Volvo, Manganese Bronze, and the latter is exactly the maker of what Cameron mentioned--London taxi.

Li Shufu, who failed to get a license for making cars before, now is becoming a "saver" for automobile industry in a sense.

However, his "saver action" is not out of his hero complex but his clear mind and careful calculation as a Zhejiang businessman.

In fact, Geely also attended the bid of Jaguar and Land Rover in 2008 when Ford put them for sale. But Li Shufu thought they were not worth that price. 

"Jaguar and Land Rover are not at the same level with Volvo in terms of their values. Geely doesn't need the factory but the R&D capability. It also needs to fit the tendency of car development in the future, such as self-driving technology, zero emission, and zero casualty, while Volvo has engaged into these research for many years before being acquired by Geely."

The reasons for buying Volvo never changed: Volvo fits Geely most and it can help Geely's future development. First, it is the safest in the world; second, it has good R&D capability and brand identity; third, it has a proper scale, not too small, not too big.

The decision was right, but Li Shufu was seriously questioned after the purchase: Ford even failed to save Volvo, how Geely could do it?

However, this is not a problem for Li Shufu: "as for business, you can sell it when it is stuck in a slump, you can also sell it when it is at the peak time. What you sell is not necessarily bad."

After the acquisition, Ford CEO Alan Mulally said: "we sold Volvo doesn't mean it is not good, instead, it is a very good brand. We sold it just because we put all our resource and focus on Ford cars to seek growth under the strategy of 'one Ford'."

The early listed price of Volvo was over 6 billion dollars, but Geely got it at 1.8 billion dollars in the end. Li Shufu thought this price was very good. He said: "6 billion dollars was the listed price against the context of financial crisis, I think the normal price would be 20 billion dollars or even higher." The global brands list released by Forbes showed that the brand value of Volvo, which had a history of nearly 100 years and was famous as the safest luxury car, was worth 2 billion dollars.

The integrator's layout

The purchase is just the first step. How to make it operate after the purchase? How to coordinate it with Geely to achieve the best synergy?

Volvo's major factories were located in Sweden and Belgium before the buying, while the high pay and welfare in those countries were criticized as the reasons why Volvo's cost always maintained so high.

However, Li Shufu had no intention to reduce the cost even after he bought Volvo. In fact, in the first year after the purchase, Volvo didn't downsize, instead, it increased employees. Volvo employees' satisfaction hit a record high of 84%.

Compared with reducing cost through layoffs, joint developing is a better way to reduce cost and achieve synergy.

In March, 2012, Volvo signed an agreement with Geely in Shanghai to transfer its technology to Geely. In late 2012, they signed another three agreements for technology cooperation. Through these agreements Volvo would help Geely to build a platform for small and medium-sized cars and improve technology for car safety and inside air quality. In September, 2013, Geely's European R&D center in Gothenburg, Sweden officially started. Relying on this platform, Geely and Volvo could develop different models respectively.

The benefits of joint developing lie in that designs would be introduced from China at the beginning, which means a lot for joint purchase, cost reducing, and efficiency improvement.  

For Volvo, its cost can be reduced by joint developing and purchase with Geely, while for Geely, its frequent exchanges with Volvo are enough to improve its quality despite their different product positioning. Li Shufu said: "we researched car's structure alone before, and we met many problems, but now we can learn a lot from Volvo."

The leader's low-profile

"There is a big space in China's car market, and Geely is a proper leader," this is the major reason Li Shufu convinced Ford and Volvo at that time.

In August, 2013, Volvo's localization program was officially approved. At present, it has established three factories in Chengdu, Daqing and Zhangjiakou and one R&D center in Shanghai. The three factories strictly adhere to Volvo's regulations and management so as to produce the same quality cars as its European counterparts. 

Last year, Volvo's sales in China increased 45%, but Li Shufu was still not satisfied with it. He explained: "There are 12 million cars sold in European market a year, of which Volvo accounting for 300,000 units, while the cars sold in China are 20 million a year, of which Volvo accounting for only 60,000 units, so there is much space to increase." Li Shufu plans to increase Volvo sales in China to 200,000 units every year in the future, and achieve 20% market share in China's luxury car market.

Nevertheless, there is a lot to do for this end.

Li told a story to the Talents Magazine reporter. He attended an activity once with a famous entrepreneur. The entrepreneur asked him, "Did you advertise that Volvo is the safest car?", which triggered Li's thinking. Volvo is famous for its safety in the world, which can be explained by many years of data and surveys. In fact, US road safety standard was made with reference to Volvo's safety standard after the Federal Highway Administration was established in 1970s.

Volvo developed almost all the technology related to car safety, including three-point safety belt, children's safety chair, and urban safety system. According to the case analysis by Swedish police and insurance company Folksam in 2013, Volvo's safety index topped the list with 12% more than the No.2.

Li Shufu thought that other people must have the same question as these famous entrepreneurs did. He added: "Volvo buyers in other countries always keep a low profile, but the case in China is opposite. If you don't say it, you would be seen as unconfident. So keeping a low profile would weaken its competitiveness instead."

Therefore Volvo enhanced its publicity in China after the acquisition and reaped a good result. Last year, its sales in China rose 45%, which was much better than in US and Europe.

Without doubt, China embraces the biggest market share in the world, but Chinese companies just repeat the strategy of "going global" due to their limits in technology and management. They have different ways to "go global", and most of them hope to increase shares in the international market through going global.

But Geely bought Volvo not to get its access to the foreign market but to introduce its technology and products to China, and this is what Geely wants most. In other words, Geely bought Volvo not to expand but to improve itself.

This is a wonderful story of "bringing in" rather than a typical story of "going global".

The most awesome directors

The satisfaction of Volvo's employees rose to 84% after the acquisition, just as Li Shufu said: "Volvo's employees have witnessed an independent Volvo, and they believe Geely won't incorporate Volvo. They are encouraged to find the sense of being an owner."

Geely's Vice President Wei Mei told Talents Magazine reporter that Volvo's employees have changed a lot in values and company culture, and they've found more sense of responsibility than before.

Before the acquisition, Ford sent one to two hundred employees to Volvo, whose many senior officials were Americans. While Geely did not do that.

After the acquisition, Li Shufu insisted: "It is Volvo's own business to get survival."

In Sweden, Volvo's board of directors is considered as the most awesome board by local people, which includes many bigwigs: former Volvo CEO Hans-Olov Olsson, former Tata Motors CEO Cari-peter Forster, former Audi CEO Herbert Demel, former Maersk CEO Lone Fønss Schrøder, former Chief of MAN Group Hakan Samuelsson and the newly former IKEA CEO Mikael Ohlsson. In this great group, only Li Shufu, Li Donghui and Zhang Peng are from Geely.

However, an awesome team wouldn't absolutely win the game. How to make them engaged and committed to Volvo's development?

Board members are generally not well-paid, so these big figures above mentioned never come to Volvo for money. Then why do they want to work for Volvo? There are two reasons as Li Donghui said: First, Volvo has won global reputation, so they feel proud to be its directors; second, Li Shufu has won directors' respect and recognition on the strength of his strategic wisdom and full trust in directors. They have fostered good faith in each other.

During the first two years after the acquisition, Li Shufu never missed the board meeting which was held six times a year. Now, he still always communicates with these directors, either personal talks or the weekly teleconference with Volvo's CEO. 

In the eyes of a Geely senior official, the biggest value Geely has brought to Volvo is that "Volvo has a real global perspective now".

Various comments on Li Shufu

Wu Yingqiu (Vroom Magazine publisher, senior automobile commentator):

He has changed a lot during these years. His thought was simple in the past: cars were made of four wheels and several chairs, so people called him a "car nut". But now foreign media call him a car genius, the Chinese "Henry Ford". He would think something that common people have never thought, such as whether human brain could be connected with car "brain", the future car is a battery plus a super computer. He keenly observed the auto industry has entered the smart and Internet era from physical and electronic era; besides, he is very open to the Internet. That is a very good quality. 　

Sun Xiaodong (Vice President of Geely Holding Group and General Manager of Geely Sales Company):

Li is very open-minded. What he thinks sometimes is unexpected. I don't mean his every thought is right, but his mind is very free. He would think something we don't even dare to think.

Wei Mei (Vice President of Geely Holding Group and Human Resources Director):

Li asked very practical questions when he interviewed executives. He never asked questions like "what's your dream", instead, he asked specific questions such as the fuel consumption, length and cab design of a specific model, and how long you have worked in this industry. He also values your new ideas beyond car industry.

The exclusive interview to Li Shufu

"Nothing is easy."

Talents Magazine (TM): Volvo started localization in August last year. Did you think that you had to wait for over one thousand days to get the project approved?

Li: I didn't know how long I had to wait, but I knew it was not easy, and it's not easy either in the future. We are a manufacturer, and manufacturing itself is a hard job.

TM: Does Volvo bring more challenges to you than Geely?

Li: New things must be challenging. I have a lot to learn, and now I keep learning every day. The members of Volvo's board are all the top experts in the world. To be honest, they do much better than me in company management.

TM: Do you manage Volvo and Geely in very different ways?

Li: Yes, there is a big difference. In fact, I don't manage the two companies in the specific respects, and I just set requirements for them, for Geely, I require it from the perspective of users, and for Volvo, I require it from the perspective of shareholders. 

TM: what do you mean by "Geely is Geely and Volvo is Volvo"?

Li: people maybe think that I say this just not to weaken Volvo brand. That's wrong. Actually I say this exactly to make all Volvo employees understand that they are independent. I want them to explore their own ways to survive and develop. I won't tell them where to go, and I don't know where to go either. We all need to work and think about the future. But now, they are moving forward very well.

TM: do you think Tesla represents the tendency of auto development?

Li: not necessarily. Does Tesla make money now? How to prove? We need to be open to new things.

TM: it is said that the "Golden Ten Years" in China's auto industry has past, so China's car sales won't increase as fast as before, and a saturated car market would appear in around 2020. What do you think of it? Geely and Volvo would be affected?

Li: the world changes every day. The thing we can do is to focus on the present job, make right plans and strategies, and then surpass others. That's enough. As for market growth, sometimes it's fast sometimes it's slow even stagnant. But that doesn't matter, because we have a market with an annual scale of 20 million cars now. We need to expand through stronger competitiveness and more market shares rather than more total sales.

TM: what's your ultimate pursuit?

Li: what is ultimate pursuit? Life is a journey of constant struggle, and everybody would die in the end, so there is no ultimate pursuit. 　　

The prediction of adventurer Li Shufu

Geely has ranked in China's top 500 for ten years with its total assets exceeding 100 billion  yuan; and it became world top 500 in 2012 and 2013 successively.

However, this honor doesn't mean Geely will always be safe. The auto industry will experience big changes in the near future. It is well recognized that the shock from IT industry would pose crisis to traditional auto companies.

On January 6, Google announced to establish an Open Automotive Alliance with Audi, GM, Honda, Hyundai Motor and NVIDIA, so as to apply Google's Android system to auto industry. As early as 2012, Apple announced to apply Siri to cars, and now the first Siri-loaded car has come out.

Wu Yingqiu expressed his idea: "now it is the mobile Internet time, so any product will get affected, and automobile is not exceptional.

Luckily, Li Shufu likes reforming though Geely is a traditional auto company. He believes that the Internet is not a barbarian but a friend for auto industry. As he said, "there is no doubt that cars in the future will enter the era of Internet Big Data, but car companies won't be defeated by the Internet."

During the interview, Li Shufu repeated that future cars will be driverless, intelligent, informational, electrically driven, zero casualty, and zero emission. The access to the Internet will make cars smarter, safer and friendlier to the environment.

In fact, Volvo has kept the leading position in the fields of driverless and smart car.

In 2014, Volvo will launch new model XC90, which is loaded with a high-smart accessory system for self-driving under driver's surveillance. Besides, the car can identify roadsides and roadblocks and rectify deviations in case of collision. Volvo is a pioneer in these technologies in the world.

Li Shufu is always eager to introduce driverless to people no matter where he is. Volvo projects to launch fully self-driving cars by 2020.

In a sense, Li Shufu never stops exploring the future and make a try, while, most of those who know him think he is able to sense the future development.