Volvo dumped 28 billion luxury electric ＂baggage＂ to Geely.
Volvo pulled out of the pole star and its share price soared by 30%.
Volvo Car announced that it will no longer provide funds for Polar Star and plans to reduce its holdings. The reduced shares will be mainly taken over by Geely.
In the past, some analysts believed that Volvo held a large number of polar stars, which dragged down Volvo.
The market reaction confirmed this view, and Volvo’s share price soared just after the announcement.
Volvo pulled out and its share price soared.
Volvo Car (hereinafter referred to as Volvo) announced that it would stop blood transfusion to Polar Star and adjust its shares.
At present, Volvo is evaluating the distribution of shares in Polar Star to its shareholders, and Geely Sweden is the potential main recipient.
Some analysts believe that Geely will replace Volvo’s position as an important shareholder of Polar Star.
For Volvo’s reduction, Geely responded that it supports Volvo to concentrate resources on developing itself.
Geely also stated that it will continue to provide comprehensive business and financial support for Polar Star.
Geely also added that supporting Polar Star will not make Geely reduce its holdings of Volvo. This will be added, because only last month, Geely reduced its holdings of Volvo.
Volvo currently holds 48% of the shares of Polar Star. Some analysts once thought that holding such a high share was a burden for Volvo.
The market proved that this was the case. After Volvo announced its withdrawal from Polar Star, its share price once rose by 30%.
The share price of Polar Star once fell more than 15%, and its market value shrank by nearly 86% compared with the highest value.
The polar star, which just announced layoffs not long ago, is now worse, and the recent situation is in sharp contrast with Volvo.
Volvo is in a good situation, but Polar Star is in a bad situation.
On February 1st, Volvo released its performance report, which showed that its global sales in 2023 was 708,000 vehicles, driving the company’s revenue to increase by 21% year-on-year to 399.3 billion Swedish kronor (equivalent to about RMB 275.9 billion).
Excluding joint ventures and associated companies, the company’s basic operating profit is about 17.694 billion yuan, up 43% year-on-year.
What is even more rare is that the transformation results are also good:
Volvo sold 113,000 pure trams last year, up over 70% year-on-year, and the sales volume of plug-in hybrid vehicles was 152,000, up 10% year-on-year.
Simply calculate, the sales volume of Volvo’s new energy vehicles accounts for over 37.4% of the total sales volume.
Jim Ron, CEO of Volvo Cars, summed it up:
In 2023, Volvo’s revenue and profit reached new highs, which was an important milestone on the company’s transformation road.
In 2017, Polar Star, a joint venture between Volvo and Geely, did not perform well last year.
The annual sales volume was only 54,600 vehicles, and the total loss in the first three quarters was equivalent to RMB 5.27 billion.
Just announced 15% layoffs last week, saying that "the market is full of challenges", and it is necessary to adjust the business scale to cut costs and reduce blood transfusion of Geely and Volvo.
The poor performance of Polar Star is partly due to insufficient attention to the domestic market. The financial report in the first quarter of last year showed that its revenue share in China was only 1.4%.
Polar Star realized the problem, and in order to cater to the preferences of consumers in China, the new polar star 4 was designated as an SUV model.
In view of the local development in China, it was built on the vast platform of the same model SEA, the chassis was tuned by Volvo, and considering the intelligent competitiveness, Meizu’s Flyme Auto was installed on the car core.
It can be seen that Geely assembled the main battle for the battle of Polar Star 4.
In June 2022, the market value of IPO rushed to the pole star of nearly 197.3 billion yuan, which ushered in a dream start, but it was abandoned by "Swedish fellow villagers" less than two years later.
With the withdrawal of Volvo, the problem of polar star is more directly placed in front of Geely case. Geely has gained more direct equity, so it is necessary to try to make Polar Star shine again.
Editor in charge: Ruofeng