Why Did the Merger Between Geely and Volvo Fail?

[DeKarter]

Geely and Volvo failed to merge because the model of cooperation between two independent companies is the best way to ensure sustained growth. Volvo's Perspective: Håkan Samuelsson, CEO of Volvo Cars, stated: 'After evaluating different options for realizing value, the joint conclusion is that the model of cooperation between two independent companies is the best way to ensure sustained growth, while achieving technological synergies in many areas.' Geely's Perspective: Li Shufu, Chairman of Zhejiang Geely Holding Group, said: 'As a shareholder of these two wholly-owned and listed companies, Geely Holding Group benefits greatly from deepening partnerships and alliances while maintaining independence.'

[JoshuaLee]

From a brand and cultural perspective, I believe the main reason for the failed merger between Geely and Volvo lies in their fundamental differences. Volvo is a longstanding European luxury car brand, emphasizing safety and premium design, with a culture rooted in precision and elegance. Geely, as a domestic Chinese brand, excels in cost-performance and agile innovation. Forcing these two together could easily create brand identity confusion for consumers—imagine Volvo drivers expecting Scandinavian sophistication, only to feel diluted by Geely's elements. In reality, their technology sharing makes sense, like jointly using the CMA platform for EVs, but full integration would add friction points. As an auto enthusiast, I've noticed such cultural clashes are common in the industry—even German-Japanese joint ventures face issues. Ultimately, maintaining independence better preserves each brand's identity, avoids internal conflicts, and benefits long-term growth. The merger's failure might be a wise choice, allowing both to focus on their strengths.

[MacGabriela]

From an economic market perspective, I believe the merger didn't succeed primarily due to the high costs and risks involved. The unstable macroeconomic environment, pandemic-induced global supply chain disruptions, and rising prices meant that integrating two major companies would require massive investments in workforce and production line restructuring – something shareholders would naturally weigh carefully. Volvo's focus on the premium EV market is profitable, while Geely thrives in the mainstream vehicle segment. A merger could create conflicts in market segmentation and profit distribution challenges. I reckon independent operations are simpler – collaborating on shared technology platforms already achieves significant cost savings, whereas full integration might actually hamper efficiency. With numerous market uncertainties like the 2021 global economic downturn, rash action carries excessive risk. Focusing on existing partnerships makes more sense. This decision safeguards both companies' shareholder interests, avoids unnecessary complications, and proves more cost-effective long-term.