Volvo’s China Sales Fall 40%! Since Geely Bought It, It’s a Soulless Walking Corpse

A Volvo dealership in Fuzhou closed after six years in business. Watching its sign come down, an employee struggled to say goodbye. They said they had spent six years of their youth there. The vlogger choked up. It's hard to leave the customers who trusted me all along and the colleagues who worked beside me. If one day you can't reach my work account, please don't be upset. I'm not ignoring your messages. The company has simply closed the account. One user went to the Sichuan Changzheng Volvo dealership for service, only to discover it had closed and left the dealer network. The user was surprised and wondered who would handle problems with the car and how to protect their consumer rights. Rumors have been circulating that longtime luxury brand Volvo is in serious trouble, or even close to going out of business. Volvo Cars, controlled by China's Geely Holding, announced another 2,500 job cuts on October 23rd, mainly in Sweden. Its third-quarter operating loss was far worse than expected, sending its shares down nearly 30%. Volvo Cars reported an adjusted third-quarter operating loss of about US$373 million, far above the roughly US$73 million markets expected. Its adjusted gross margin fell 14.7% from 20.4% a year earlier. Revenue dropped about 23% to roughly 6.7 billion U.S. dollars. Alongside about $2.3 billion in previously announced cost cuts, the company plans to cut another $500 million in overhead and variable costs. It expects those savings by the end of next year. Volvo Car CEO Håkon Samuelsson told Reuters, The third quarter of 2026 was very disappointing and reflects a year that has become far more challenging than originally anticipated. Our ongoing turnaround plan therefore needs a decisive reinforcement. The new measures are expected to affect about 6% of employees, including roughly 2,000 positions in Sweden. They involve ending consulting contracts, leaving vacancies unfilled as people leave, and offering targeted exit packages. These cuts come on top of 3,000 job cuts already announced. Samuelsson said the latest cuts would be completed by mid-2027. Further action could follow if the turnaround plan falls short. Volvo shares hit a record low last week and have lost more than two-thirds of their value since listing. Third-quarter retail sales in Greater China fell 40.6% to just 20,284 vehicles. Revenue in China was about US$480 million, well below the US$830 million a year earlier. First-half sales in Greater China fell 27% to about 53,200 vehicles. The company withdrew its first-year sales and cash flow forecasts earlier in October. It said it would prioritize profit margins over market share in China and avoid aggressive price competition with local rivals. It plans a similar approach in the United States. Volvo also sharply cut S90 prices in China in September. The model starting list price was about US$61,000, but subsidies and discounts brought prices as low as roughly 33,000 U.S. dollars. Sales rose from just 388 vehicles in July to 1,554 in August, about four times July's figure. Still, overall sales remained low. Industry sources say the global luxury car market is struggling, but Volvo's troubles this year stand out even among its peers. To understand how Volvo got here, we need to look back at its history. China's Zhejiang Geely Holding Group bought the company in 2010. By then, Volvo had become a major burden for Ford. Ford bought it for $6.5 billion in 1999, then faced the financial crisis with $26 billion in debt. Volvo posted a pre-tax loss of about $1.69 billion in 2008. Ford initially wanted around $6 billion. Geely negotiated that down to $1.8 billion. Another $900 million in working capital brought the total to $2.7 billion. By the time the deal closed, factors including a weaker euro, had reduced the purchase price to $1.5 billion. A brand bought for $6.5 billion changed hands about a decade later for less than a quarter of that price. Ford took a heavy loss, while Geely secured a bargain. That starting point shaped what followed. The seller wanted out, and the buyer wanted the assets. Neither side was focused on saving the company. At the same time, Geely had been making cars for only over a decade, mainly low-end models. Its 2007 revenue was about $1.6 billion, compared with Volvo's $10.6 billion. The companies were vastly different in size. Geely needed what Volvo had, safety technology, vehicle platforms, and a luxury brand's ability to command higher prices. Coverage at the time called the deal a breakthrough for China's auto industry. It gave Geely a globally recognized brand and advanced automotive technology, while also giving Chinese automakers a foothold in Europe. Geely president Liu Shufu also made the financial case. Ford and Volvo had invested more than $10 billion in new energy vehicle technology over a decade. That alone, he argued, made the price excellent value. The calculation centered on technology, branding, and markets, rather than Volvo's future. Geely made several promises to win approval for the deal. Volvo's headquarters and research center would stay in Gothenburg. Factories in Sweden and Belgium would remain open, and there were no plans to lay off workers. When the deal closed, only two of Volvo's 11 board members, including Li Shufu, represented Geely. Another three represented labor unions. These arrangements reassured the Swedish public and made the takeover appear relatively restrained. But the promises focused on keeping things as they were, rather than ensuring Volvo could grow independently over the long term. Preserving the status quo offered temporary protection. It would not prevent later shifts in strategy and resources. One development has been repeatedly highlighted since then. The modular vehicle architecture developed under Volvo's leadership became a shared foundation for several Geely brands. It helped new brands such as Link & Co. grow quickly. Geely's vehicle engineering also rapidly closed the gap with foreign joint venture brands. Volvo supplied advanced technology and helped Geely move upmarket. That was a reasonable commercial return on the acquisition. But it also meant Volvo's engineering expertise served the whole group, rather than focusing on strengthening Volvo's own independent position. The century-old brand gradually became one important part of a larger group, rather than a flagship protected in its own right. Land Rover offers a sharp contrast. After India's Tata Group acquired the luxury off-road brand, its competitive strength grew. It enjoyed one of the strongest periods in its history and secured a place in the ultra-luxury and rugged off-road markets. Many initially feared Indian ownership would cheapen the brand. Instead, Tata invested in its long-term growth and gave the British team extensive freedom over research, development, and operations. The same happened after Germany's BMW Group acquired Rolls-Royce and Volkswagen Group acquired Bentley. Fears that the brands would lose their identity or decline did not materialize. Instead, their competitive strength and market performance reached historic highs, reinforcing their leadership in the global ultra-luxury market. A key reason was that Tata and the German automakers provided funding while carefully protecting each brand's distinct identity and character. Rolls-Royce and Bentley, in particular, were revived with modern manufacturing technology and the financial resources of their German owners. After its acquisition, Volvo's growth became increasingly dependent on China. It built factories, expanded capacity, and sought growth there. That paid off while the market was expanding, but when China's car market cooled and local price wars intensified, the dependence became a weakness. Meanwhile, Volvo's defining Nordic qualities of reliability, restraint, and safety became less distinct amid its push for full electrification and smart technology. It tried to appeal to Chinese buyers while maintaining a premium European image and struggled to satisfy either group. Volvo announced early on that it wanted to sell only fully electric cars by 2030, but its early bet on EVs ran into high costs for battery materials. Production growth stalled, forcing it to lean more heavily on plug-in hybrids. In 2024, weaker-than-expected EV demand led Volvo to revise its electrification target, it, allowing mild hybrids to account for up to 10% of sales. Repeated revisions showed that its initial expectations were too optimistic. In the second quarter of 2025, Volvo also wrote down about $1.15 billion in EV-related assets and posted a net loss of more than $800 million. A brand known for reliability kept changing strategic direction. It struggled to keep up with new technology and to control costs. 2025 became a turning point. Former CEO Jim Rowan abruptly left in late April, and Samuelson returned to lead the company. Volvo then announced about 3,000 office job cuts worldwide, roughly 15% of its white-collar workforce, alongside a cost-cutting plan worth $1.8 billion. It cited slowing EV sales in Europe, stronger competition from Chinese brands and U.S. tariffs. Global sales fell 12% that June, while fully electric sales dropped 26%. Its shares were down 27% for the year. It had already withdrawn its profit forecasts for the next two years in April. Conditions worsened in 2026. China, once seen as its growth engine, had become its biggest drag. Over those 16 years, Volvo's path followed a clear pattern. Ford, eager to enter the Chinese market, sold it cheaply to Geely. Its technology and brand were absorbed into the group. It then had little cushion against the shift to EVs and swings in China's market, ending up with major job cuts and falling sales and revenue. This was more than bad luck. It reflected the cost of a deal centered on the buyer's interests. When a new owner focuses on technology, brand premiums, and its own advancement, the acquired company's future becomes tied to that owner's strategy in the Chinese market. The promised rescue becomes a cautionary lesson. Starting in 2023, Volvo tried to escape its troubles by first quietly allowing dealer discounts, then being forced to introduce official price cuts itself. Those cuts failed to turn the company around and instead added to its difficulties. One automotive vlogger put it this way. Let's talk about Volvo in China. Last month, the XC60 sold 1,500 vehicles, the S90 sold 1,500, the XC70 sold 1,300, and the S60 sold just 1,100. Those numbers certainly aren't high, but sales haven't completely dried up either. That sums up where Volvo stands here. It can survive, but growing bigger and stronger looks out of reach. The vlogger said Volvo's brand identity and designs have always appealed to a smaller audience. But those buyers are deeply loyal. When buying or replacing a car, they mostly only consider Volvo. That group alone could easily support more than 10,000 sales a month across the lineup. Earlier T-Series XC60 models consistently sold 5,000 to 6,000 a month, peaking above 7,000. The S90 regularly sold more than 3,000 a month, sometimes topping 4,000. Now, monthly sales have fall into a little over 1,000, or even just a few hundred. The problem lies with Volvo itself. The same small group of buyers remains loyal, but Volvo has changed. A series of decisions has eroded the brand's identity. The most damaging decisions were discounting the V-Series, then launching the XC70. Station wagons were the foundation of Volvo's reputation, a vehicle type it invented. Dropping them meant abandoning its most loyal fans. The XC70 is not a pure Volvo. It is essentially Geely's Lynk & Co 08 with a different body. Volvo buyers want something distinctive and premium, Scandinavian design with the feel of an imported car. But the XC70 brought labels such as a re-bodied Geely and built just for China, weakening that premium image. The exclusive reputation built in the last century, combined with the reliable reputation of its T-series models, was undermined by those two decisions. Safety was Volvo's proudest competitive advantage, but it no longer stands out the way it once did. For roughly 12 years, from the launch of its City Safety advanced auto brake technology in 2008 to around 2020, Volvo led the field. It set the benchmark for crash protection, including body strength and airbag counts, as well as systems for automatic braking and evasive steering. Other automakers measured their safety designs against it, but as Chinese electric and hybrid brands rose, rivals applied fierce price pressure. Widespread false advertising also clouded the judgment of many Chinese buyers with little driving experience. Meanwhile, Volvo's own platform went 10 years without a generational update. Its safety advantage became less decisive. Besides these mistakes, Volvo made others. These included ending T8 sales and the camshaft controversy. Many blame camshaft problems for the sales plunge, but those problems were the trigger. The underlying cause was the combination of all these factors. From late 2025 into 2026, camshaft and related component failures emerged across several Volvo models with B-series engines, including the XC60 and S90. Owners organized to demand remedies, drawing widespread attention. Some said their new cars developed problems after only a few thousand miles, even before their first scheduled service. Others experienced problems shortly after their warranties expired. Symptoms included check engine lights, rough idling, and unusual noises. In several cases, cars suddenly lost power at highway speeds. The problems badly damaged Volvo's reputation for safety and quality craftsmanship. The vlogger said Volvo never lacked customers. From the start, it did not need to appeal to everyone, only to buyers who appreciated it. But Geely's decisions have left Volvo neither exclusive nor premium enough to satisfy its loyal following. Those buyers did not need longer wheel bases or lavish interiors. Otherwise, sales would have plunged during the T-Series era. They wanted Volvo's distinctive premium identity and an undisputed lead in safety. With neither intact, sales fell sharply. Those customers are now switching to Chinese electric and hybrid models, or considering other luxury brands. Having lost their trust and support, Volvo can only cut prices to generate sales. Even then, the results have been disappointing. Commentators say Volvo is not an isolated case. China's SAIC took control of South Korean's Ssangyong in 2004. Contract disputes followed over transfers of sensitive technology. By 2009, Ssangyong had posted record losses. SAIC refused a bailout and ended the partnership. Ssangyong eventually entered bankruptcy restructuring. Volvo's failure goes beyond a lack of funding after the takeover or market conditions alone. Its decline reflects the loss of its identity under Geely's control.