Essay: The prime objective behind the acquisition of Volvo

Responding global market and meeting the market demand driven by technological forces was unattainable for Chinese automakers. There are now many global automobile firms operating in China but what about the time when China seemed to fall behind in chasing the trend of the global automobile market? Some major mergers and acquisitions took place in the recent past which strengthened the overall position of the Chinese automobile industry. Geely’s acquisition was somehow a relevant response to the sorry situation of the Chinese automobile industry (Nordstrom, 2010).

Geely is now the industry leader among the domestic competitors comparing with other rival countries such as Japan, Germany, and the United States. However, the question about technological innovation and change remained in its place. The prime objective behind the acquisition of Volvo is to gain core competencies in the global market. Revealing facts of the global automotive industry show that sustaining the overall market growth of the automobile industry is no longer existent. In order to stand the competition, companies must gain core competencies, which Geely did. Companies such as Toyota, Honda, Ford, and all others are all evolving into a technological era every second of the business. Therefore, the rapid upgrade and technological change were important for Geely. Volvo’s Swedish manufacturing plant was funded by Geely and revealed great knowledge to Geely about European design, materials, and technology (Zhou, Zhang, 2010).

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