MUNICH -- Truckmaker Volvo AB is exploring closer ties with Zhejiang Geely Holding Group in China, in a sign the Swedish company and its largest investor are taking steps to collaborate.
“We see a lot of areas where we feel that Geely can add both insights and competence,” both in its domestic market and “certain technologies,” CEO Martin Lundstedt said in an interview.
The CEO’s comments offer the first clues into the truckmakers’ plans since Geely became Volvo’s largest shareholder in a 3.25 billion-euro ($3.7 billion) deal in December 2017, adding to Chinese billionaire Li Shufu’s growing global footprint.
Li owns the Volvo Car nameplate and controls Lotus sports cars. He is also the biggest shareholder in Mercedes-Benz maker Daimler. Geely plans to build Lynk & CO branded cars in Europe from 2020.
At the time of taking the stake in the truckmaker, Geely said it sought to contribute on electrification, autonomous driving and connectivity to boost development of the Swedish company.
While Daimler and Geely have agreed to collaborate on short-term-rental and ride-hailing services in China as well as building the German company’s Smart city cars, Volvo hasn’t so far outlined cooperation projects with the shareholder. Lundstedt declined to specify any details about talks with Geely.
“Experience and what has been expressed has been very positive,” he said, speaking at the Bauma trade fair in Munich.
Volvo boosted operating profit last year and raised its dividend, saying in January that it expects demand in key markets to hold up in the face of growing economic uncertainty. Since then, headwinds in Europe have increased, with Brexit unresolved and Italy slipping into recession at the end of 2018. Germany’s economic growth this year is expected to slow to less than half the rate previously expected amid global trade disputes.
Volvo is on “strong ground” to meet any increasing challenges, even as markets are expected to weaken, Lundstedt said.
“Recession might be a strong word, which we already guided for during the fourth quarter report, but some sort of correction is rather expected, actually,” he said.