CEO of Geely-owned Volvo Cars loses board seat at truck maker after Li Shufu buys Daimler stake

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No re-election at AB Volvo for Hakan Samuelsson after Geely chairman buys US$9 billion stake in Mercedes-Benz parent

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Geely owns Volvo Cars but only has a 8.2 per cent stake in truck maker AB Volvo. Photo: Bloomberg

Daniel Renin Shanghai

Published: 9:15pm, 27 Feb 2018Updated: 8:22pm, 3 Jul 2018

Swedish truck maker AB Volvo dropped the chief executive of Volvo Cars from its board after Chinese billionaire Li Shufu, founder and chairman of Zhejiang Geely Holding Group, bought a 9.7 per cent stake in German car manufacturer Daimler.

The move is the latest sign that the global auto industry is ratcheting up pressure on Geely, which owns Volvo Cars and has a 8.2 per cent stake in AB Volvo, to reveal its global strategy amid active asset buying around the world.

“The reason Hakan Samuelsson is not proposed for re-election is the announcement that Geely Group has become the largest shareholder of the German vehicle manufacturer Daimler, one of the Volvo Group’s major competitors,” the company said in a statement.

Geely spent about US$9 billion on the stake in Daimler – parent of German marque Mercedes-Benz – in the open market, according to a stock market filing on the weekend.

The share purchase is being viewed as a step up in efforts by Li to implement Geely’s “go global” strategy, as the Chinese carmaker continues to marry European styling and technology with its manufacturing capability and the vast potential of the mainland car market.

“From the engineering perspective, a marriage with Daimler is no easy job since Geely and the German brand are not in the same class,” said Peter Chen, a Shanghai-based engineer with US components maker TRW. “Geely needs to take a step-by-step approach to assimilate technologies and gel with Daimler’s management.”