The car factory has been built by Swedish carmaker Volvo. The factory is “owned by Geely, financed by Geely, and operated by Volvo,” tells me the plant’s manager Benoit Demeunyck, a bearded Belgian with an imposing figure, especially when surrounded by smaller Chinese. Demeunyck has been mass-producing car factories for many years. Luqiao is the third he built in China, “after Daqing and Chengdu,” and it looks like there will be more.
How Volvo came to China is another platitude-defying story.
When Volvo’s former owner Ford was perilously short of money during carmageddon, Geely bought Volvo in 2010 for a bargain-basement $1.5 billion. It was one of those rare deals that worked all around. Ford came through alive, if not entirely unscathed (it also sold Jaguar Land Rover to India’s Tata, Aston Martin to private investors, and its controlling share in Mazda to Japanese banks.) Volvo was not dismantled and shipped-off to China, as many predicted.
Geely did not buy Volvo for its worn-out toolings, or its dated manufacturing lines from the Ford era. Geely bought Volvo for its ability to come up with class-leading, future-proof technology. Volvo engineers gave Geely a head-start in autonomous tech, and they developed the Compact Modular Architecture (CMA), a smaller but equally advanced version of Volvo’s acclaimed Scalable Product Architecture (SPA). Flexible and scalable architectures are the secret to success in the auto business. Volkswagen has MQB and MLB, Toyota has TNGA, Renault-Nissan-Mitsubishi has CMF-A, B, and C.