Volvo Cars should do more to leverage global partnerships, Geely Holding's Li Shufu says

Volvo Cars should do more to leverage global partnerships, Geely's Li Shufu says

Volvo Cars Urged to Deepen Cooperation and Enhance R&D in China

Calls for Stronger Collaboration with Sister Brands

GOTHENBURG, March 31 (Reuters) - Volvo Cars should deepen cooperation with sister brands such as Polestar and Geely Autos and bolster its research and development capabilities in China, Volvo Cars and Geely Holding chair Li Shufu said on Tuesday.

Strategic Moves and Financial Decisions

The Swedish carmaker, majority owned by Geely Holding, said earlier on Tuesday it would swap more than $300 million of Polestar's debt into shares to streamline U.S. production. The move came a day after Volvo announced an exclusive European distribution deal with Lynk & Co, another Geely brand.

Risks of Isolation and Board's Response

"Working in isolation will ultimately lead to a self-destructive path to obsolescence," Li Shufu said during Volvo Cars' annual general meeting, referring to more than $1 billion in impairments the company booked last year.

"The board is actively working to address these serious challenges and is working to identify viable solutions without delay," he added.

Market Challenges and Leadership Changes

Amid a slowdown in electric vehicle demand and mounting pressure from tariffs, Volvo Cars last year brought back its former CEO and previous Polestar chair Hakan Samuelsson, who has said synergies will be central to his strategy.

Leveraging Geely Relationship for Cost Efficiency

"The relatively new Chinese automotive industry is going to take a large part of the market," Samuelsson said on Tuesday.

"We have a unique opportunity with our relationship with Geely to use these synergies and minimise the development costs and also take on board lower costs for materials and modules."

Reporting Credits

(Reporting by Marie Mannes and Alessandro Parodi. Editing by Louise Rasmussen and Mark Potter)