Volvo Announces Plans for IPO

Volvo Announces Plans for IPO

Posted by Max R on 3rd Sep 2021

As many of you know, the beginning of this year was a bit crazy within the stock market. Stocks like $GME and $AMC that were thought to be on a decline gained tremendous value within a few days. Investing in these stocks had little to no basis, outside of riding a wave of mass market manipulation.

Later this year, you may be able to invest in one of your soon-to-be favorite stocks. Ever since 1999, Volvo Cars has been owned by parent companies. Volvo has plans to change that and buy out their current owners at Zhejiang Geely Holding. Zhejiang Geely would continue to be a major shareholder of the company, influencing Volvo’s decisions in the future.

Volvo has been an industry leader in adopting climate-friendly practices, including moving towards electric vehicles, sustainable materials, and climate-neutral facilities. Zhejiang Geely Holding’s Chairman Eric Li stated that they have enabled Volvo Cars “to become a true premium brand with improved profitability,” and that they look forward to supporting the aforementioned initiatives.

The first step in the direction of independence is the acquisition of 50 percent of its Chinese operations. This includes Daqing Volvo Car Manufacturing Co., LTD and Shanghai Volvo Car Research and Development Co., Ltd. China accounts for roughly 25% of Volvo’s car sales, and this acquisition will make Volvo Cars “the first major non-Chinese automaker with full control over it’s Chinese operations,” according to Hakan Samuelsson. This effort is to create a clearer distinction between Volvo Cars and it’s parent company, helping propel the unprecedented growth Volvo Cars has seen in China the past couple of years.

During the first half of this year, Volvo has seen a 26% increase in revenue from the first half of 2020. Such growth is expected to be halted, however, after experiencing microchip shortages. Demand is up, but supply is down as the entire industry sees manufacturing backups. Once the chip shortage is solved, growth is expected to continue.

While I don’t know nearly as much as a lot of people regarding investing, I do know that any investments you do make should be in companies that you believe in. This is something Volvo has been encouraging for decades now within their advertising. And with current trends, Volvo’s initiatives seem more and more in line with what other auto-manufacturers may begin to replicate.

The topics in this article are strictly for entertainment purposes only, and in no way are meant to be interpreted as financial advice.

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