Zhejiang Geely Holding Group, China's biggest private carmaker, said on Tuesday scale is the key to returning Volvo to profitability, but has no current plans to build the Swedish brand in China.
Geely, parent of Hong Kong-listed Geely Automobile, is prepared to pump up to $900 million in capital into Volvo, which it is buying from Ford. That would be in addition to $1.8 billion that Geely will pay Ford for Volvo.
Geely's previous plans to return Volvo to the black have involved a major new production facility in Beijing, though Chairman Li Shufu said no discussions are happening now on that front.
Profit will only emerge if we expand the business scale, thus making costs per vehicle lower, Li told reporters in Beijing, after returning from Sweden where his company signed the deal to buy Volvo.
Shifu, who has a penchant for poetry, added the two brands would remain separate, with Volvo and Geely each continuing to produce their own cars.
Volvo comes from Northern Europe and is rooted in Sweden. Volvo will not be Volvo any more if taken out of the soil, Li said. Relations between Geely and Volvo in the future will be like brothers, not father and son.