Geely looking to Volvo for domestic boost

Head of China's Zhejiang Geely Holding Group, Li Shufu, is looking to Swedish brand Volvo to boost domestic sales. The $2bn capture of the distressed General Motors unit will, according to Reuters, be bought by Geely for both domestic and overseas sales.

Already, Shufu has made plans for a factory in Beijing to make as many Volvos for China as are now made for foreigners abroad.

Last year, China overtook the US as the top automotive market, and a key market for both global manufacturers and ambitious domestic makers. However, despite the fast growth of Chinese brands and the willingness of the government to support home-grown brands, China is expected to find it tougher than neighbours Japan and Korea in taking their domestic marques to the global market.

A host of Chinese automotive firms including SAIC and rising star Geely have publicly expressed interest in selling their own brands in Western markets. But even in their home market, China's brands, which specialise in small cars selling for as little as $4000, make up less than one-third of overall sales.

It is notable that Asian counterparts such as Toyota and Hyundai firmly cemented their home markets before making forays abroad.