Volvo to license technology to Chinese parent company

Volvo's parent company Geely will provide Volvo with its knowledge of the Chinese market and lower-cost production in return for technology that Volvo plans to phase out in coming years, Vijayenthiran writes.

Bob Strong/Reuters/File
This May 2010 file photo shows Volvo's corporate logo pictured on the rear hatch of a Volvo C30 in a showroom near the Volvo Car Corporation Headquarters in Gothenburg, Sweden. Volvo, which is facing shrinking sales in established markets such as Europe and North America, will focus its attention on new markets, especially on China, Vijayenthiran writes.

Volvo will license some of its older technology to its Chinese parent Geely under a new deal signed by the two companies recently.

The technology, which Volvo plans to phase out over the coming years, includes a mid-size vehicle platform, several safety systems and cabin filter technology.

Volvo, of course, is set to introduce a new modular platform dubbed SPA that will spawn most of its future lineup.

According to Reuters, Geely will provide Volvo with its knowledge of the Chinese market and lower-cost production in return for the technology. 

Volvo, which is facing shrinking sales in established markets such as Europe and North America, will focus its attention on new markets, especially on China where the automaker plans to accelerate its growth in the coming years.

Geely hasn’t said which models it plans to use Volvo’s technology in, though the company’s chairman, Li Shufu, has previously stated that he’d like to launch a premium brand utilizing technology borrowed from Volvo. 

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