Volvo Cars Open to Partners; Dismisses Daimler Stake Reports

(Bloomberg) -- Volvo Car Group Chief Executive Officer Hakan Samuelsson dismissed reports of Daimler AG becoming a potential investor and said the Swedish automaker is open to partnerships with anyone if it serves its interests.

Last week, Manager Magazin reported that the German company would take a small stake in the company controlled by Chinese billionaire Li Shufu’s Zhejiang Geely Holding Group Co. in order to signal its willingness to cooperate. Geely founder Li Shufu acquired a 9.7 percent holding in Daimler in February.

“That’s pure speculation, there’s nothing in it,” Samuelsson told Bloomberg Television’s Tom Mackenzie in an interview at the Beijing auto show on Wednesday. “They are a competitor and there are some regulations related to that, which of course restrict any possible cooperation. But we are in principle open to cooperating with anybody if it’s in the interest of Volvo.”

Geely Group’s purchase of the stake in Stuttgart-based Daimler, the biggest single investment by a Chinese company in Germany, has spurred speculation the two European automakers could stitch up an alliance as the industry moves toward electrification and autonomous driving. Samuelsson had earlier signaled that he would keep a distance from the Mercedes-Benz owner because they are rivals.

Chinese billionaire Li’s other recent automotive purchases include control of British sports-car maker Lotus Cars Ltd. and the biggest stake in truck producer Volvo AB, the former owner of the Swedish car brand. He has transformed Geely Group from a refrigerator maker in the 1980s in hopes of creating an automobile major, placing China among the big three of the global car industry—the U.S., Germany and Japan—so they become the Big Four.

Volvo is "ready to cooperate" with anybody, including Daimler’s Chinese partners BAIC Motor Corp. and BYD Co., if there’s something concrete, but it isn’t actively looking for partners in the traditional manufacturers, Samuelsson said.

"The strategy of Volvo is based on partnerships and cooperation. We don’t believe we can do everything ourselves."

China plans to lift a 50 percent limit on investment by foreign automaker in what has become the world’s biggest car market, paving way for more partnerships and deals among local and foreign manufacturers, even as Chinese carmakers eye the European and U.S. markets. Apart from Li, at least four Chinese carmakers and three Chinese-owned startups—SF Motors Inc., NIO and Byton—plan to sell cars in the U.S. starting next year.

Samuelsson said all of Volvo’s cars will be either pure electric or electrified after 2019, and after 2025, half of its sales will be pure electric and the other half will be hybrids. He expects improved profits this year.

Volvo Cars’ first-quarter global sales rose 14 percent from a year earlier to 147,407 units on demand for S90 cars. The company also plans to introduce the XC40 small SUV to the Chinese market this year.

©2018 Bloomberg L.P.

With assistance from Yan Zhang, Tian Ying

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