Volvo's CEO Reaffirms Commitment to R&D Focus Outside China

“There’s a misconception that Geely will centralize R&D in China,” Samuelsson stated. (Mikael Sjoberg/Bloomberg)

Volvo car AB’s upcoming layoffs aren’t indicative of it’s Chinese parent company tightening its grip on product development, according to CEO hakan Samuelsson.

In an interview in Stockholm on May 23,he clarified,“People are concerned that Geely will move all R&D to China. That’s simply not true. There are no such plans; even operations in China are looking to cut costs.”

The automaker recently announced a significant cost-cutting initiative worth around 18 billion kronor ($1.9 billion), which includes thousands of job reductions aimed at stabilizing the company after facing prolonged sales struggles and delays with new models. this restructuring comes after Samuelsson’s surprising return as CEO in March at the age of 74.

Samuelsson emphasized the importance of collaboration within the group: “It benefits Volvo to reduce expenses by sharing parts and systems with Geely. No car manufacturer can produce every component independently; we have a unique chance to collaborate more closely than before.”

Li Shufu, founder of Zhejiang Geely Holding Group Co., has expressed intentions to streamline brands and enhance synergies across the institution.

However, due to tech restrictions—especially from the U.S.—having R&D outside China offers distinct advantages for Volvo. “We need Western adaptations for our software and hardware; Geely can’t handle this alone,” he noted.

the EX30 Example

He pointed out that modifications are necessary for their EX30 model—a compact electric SUV currently popular in Europe—to meet forthcoming U.S. connectivity regulations.

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The launch date for their midsize EX60 model remains on track for next year despite rumors suggesting delays due to production issues.

Sooner rather than later, significant staff cuts—notably among white-collar workers—will be announced by Volvo’s gothenburg headquarters. However,Samuelsson reassured stakeholders that these changes won’t hinder new model development.

“Reducing staff now won’t compromise our production capabilities,” he asserted confidently.”In fact,if you look back at 2020 when we had only about 40k employees but still managed numerous accomplished launches from scratch—it proves my point.”

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