When Geely announced its plans to buy an 8.2 per cent stake in Volvo Trucks from Cevian Capital some weeks ago, the message was loud and clear. China has made its intent known in the global automotive arena beyond being the largest producer of cars.

Geely has, of course, had a remarkable success story with Volvo Cars, which it acquired from Ford nearly a decade ago. The focus on technology backed by tremendous financial muscle has led to both entities benefiting from the buyout and growing from strength to strength.

However, with Volvo Trucks, the game has gone to the next level where Geely will be part of the heavy commercial vehicle space, which is a completely different kettle of fish. Yet, it is significant because it is now the single largest shareholder of a top Swedish brand that is a global heavyweight in trucks and buses.

New automotive landscape

In addition, its kitty includes Renault and Mack trucks, acquired during the turn of this century, as well as UD Trucks (formerly Nissan Diesel) that followed in 2007. These brands represent a bigger global presence across Europe, North America and Asia, which means that Geely will also benefit as a result. These are early days yet but there is no question that the name of the game has changed with China now playing for high stakes in this new automotive landscape.

However, it may be a tad premature to suggest that the next potential target could be brands such as MAN and Scania, which are part of the Volkswagen group.

VW will be in no mood to divest these in a hurry, especially when it has strengthened its base with a stake in Navistar, the US-based truck and bus maker. Yet, the future may throw up some surprises, especially when automakers need to redefine their priorities in a new era of mobility disruption where there are new rivals in the form of Tesla, Apple and Google.

After all, there was a point when VW was open to the idea of divesting Ducati, the Italian motorcycle brand, from its massive portfolio of brands. Though the idea was shelved, who knows what could be in store in the years ahead. Any similar move at restructuring its commercial vehicle business will definitely attract the interest of Chinese brands. It will be interesting to see how the Geely, Volvo Trucks story pans out in the coming months and years but if the experience with Volvo Cars is any indication, the sky could be the limit. In all likelihood, there is not going to be any dramatic shift in business priorities but perhaps a greater sense of urgency in speeding things up.

Other big players

It was barely some months ago when another Chinese auto brand, Great Wall Motors, hit the headlines for its interest in acquiring the Jeep brand from Fiat Chrysler Automobiles (FCA). Eventually, it turned out to be a case of too much smoke without any fire though there was no denying the fact that the intent was in place. In hindsight, Great Wall could have been a lot more circumspect instead of articulating its interest. When FCA denied any such move, the Chinese company hurriedly clarified that it had not begun the process of initiating talks with the management.

The dust may have settled down for the moment but there is no telling what could happen in the future. For now, FCA is making the most of the momentum generated by Jeep, which is the jewel of its crown and accounting for a large chunk of its sales and revenue. Despite this, the company has reached out in the past to its counterparts such as General Motors for a possible merger, a clear signal that consolidation is the only way out for the automotive industry.

Will FCA be tempted to spin off its Jeep business as a standalone entity if the need so arises? For now, this seems an absolutely implausible idea but if it were to actually take place sometime, Great Wall will be among the prime candidates keen on grabbing a piece of the pie. What better than a brand like Jeep to be part of its already successful SUV portfolio with top-selling brands such as Haval.

Rewind even further and the name of Dongfeng crops up. This was the company, which threw a lifeline to a beleaguered PSA Peugeot Citroen (as it was known then) when it was struggling to stay afloat in the not-so-distant past. With plant shutdown and layoffs becoming a big issue to contend with, the French automaker had no choice but to turn to its Chinese ally for help.

Today, it is a stronger (and rechristened) Groupe PSA now in place that recently bought out Opel from GM and is keen on spreading its presence in other geographies. Dongfeng will be a part of this growth journey where China and markets in the ASEAN region will be serviced jointly with PSA.

Likewise, SAIC Motor Corp has a very close relationship with GM that came to the fore during the 2009 global slowdown. India was poised to be the launchpad for this partnership with a range of cars and pickups. Eventually nothing much materialised and SAIC is now ready to go it alone in India while GM has decided to call it quits.

To think there was a time when nobody really took notice of Chinese auto brands that were hardly anything to write home about. From the skeptics point of view, all they did was to forge alliances with bigger global automakers such as VW and GM. Today, the likes of SAIC, Chery, Changan and Great Wall are extra keen on carving their own identities in the global arena.

Geely has been a remarkable story where the acquisition of Volvo Cars has led to a dream run since then with the best phase perhaps yet to come. Now, the same company has gone a step further with the more serious business of commercial vehicles where Volvo Trucks will be its growth engine. The time has come to expect the unexpected from Chinese automakers.

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