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Eastern Promise: China's First Car is Here, Via Sweden - The Big Picture

Motor Trend logo Motor Trend 5/27/2015 Angus MacKenzie

It's August 1998, and I'm somewhere over Nebraska, sitting next to soon-to-be Ford CEO Jac Nasser in the company's Gulfstream jet, en route to Detroit after a weekend at the Pebble Beach Concours. As usual, we're talking shop, and the topic of conversation soon turned to the consolidation mania sweeping the auto industry.

In May Daimler had announced the infamous "merger of equals" with Chrysler, while VW Group boss Ferdinand Piëch had snapped up Bentley, Lamborghini, and Bugatti in a stunning rapid-fire buying spree a couple of months later. The enigmatic Piëch thought he'd bought Rolls-Royce, as well, only to have it snatched from under his nose by BMW's wily Bernd Pischetsrieder.

Ford was cashed up, and Nasser eager to spend. In addition to its homegrown Lincoln and Mercury brands, Ford owned Aston Martin and Jaguar, and had a controlling interest in Mazda. But Nasser thought there was more opportunity out there.

Designed in Sweden, assembled in China, and sold in the United States. Just another day in the global economy.© Provided by MotorTrend Designed in Sweden, assembled in China, and sold in the United States. Just another day in the global economy. "What do you think of Volvo?" he asked suddenly. It was an interesting question—Volvo's management had decided to focus on heavy trucks, and the car business was in play. I replied I thought it had the potential to command the premium pricing of, say, BMW. "What do you think it's worth?" Wow. I stammered briefly: "Jeez, Jac. How would I know?" Then years of writing magazine cover lines kicked in and I fired off a glib one-liner: "Buying a premium brand is probably a lot like buying real estate—you don't pay too much; you just pay it too early."

It's probably a good thing I don't run an automaker. Or a real estate business, for that matter. Ford paid $6.45 billion for Volvo's car business in 1999, and sold it for just $1.8 billion in 2010. The buyer was little-known Chinese billionaire Li Shufu, chairman of an obscure Chinese automaker called Geely.

2015 Power List© Provided by MotorTrend 2015 Power List The quietly spoken, modestly dressed Li, who writes poetry for recreation and smiles and chuckles frequently as he answers media questions, hardly fits the stereotype of a hard-charging, self-made auto tycoon. Born in 1963, he started working as a photographer, dealt in scrap metal, and began making parts for refrigerators in the 1980s. He graduated to making whole appliances, dabbled in construction, and started making motorcycles in 1993. In 1998 the first Geely cars—the name sounds similar to a Chinese word for "lucky"—rolled off the assembly line. The quality was so bad Li reportedly refused to sell them.

By 2002 Geely, China's only non-state-owned automaker, was building cars of its own design to—by Chinese standards—acceptable quality levels. But Li wanted to be one of the first to sell a Chinese-made car outside his home market. A Geely sedan was displayed at the 2006 Detroit show, and Geely announced plans to begin export of 2,000 vehicles a year to the U.S. by 2008. However, with build quality and design features at least 20 years behind the competition, Li quickly realized the idea was a non-starter. That's when he started discussions with Ford about Volvo.

2016 Volvo S60 Inscription Side View© Provided by MotorTrend 2016 Volvo S60 Inscription Side View It took patience—and Ford's brush with bankruptcy—but Li got Volvo. Today, Volvo cars are being built at two factories in China, the brand is profitable, sales are on the rise—2014's total of 465,866 cars was an all-time record, with 81,221 of those sold in China—and engineers are working on a new C-segment platform that will be shared among Volvo and Geely cars and SUVs. And this year the long-wheelbase S60L from Volvo's new plant in Chengdu, China, will become the first Chinese-built car to be exported to the United States.

How long before Geely joins Volvo here in the States? Li won't elaborate. "There is no specific timetable," he says simply. "Ambition? Yes. Determination? Yes. But I'm also a very realistic person. We have to have every step right."

Makes sense. As Henry Ford once said, "Before everything else, getting ready is the secret of success."

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