By Norihiko Shirouzu HANGZHOU, China (Reuters) – “Do you know how big Volvo is?” asked Don Leclair, chief monetary officer at Ford Motor Co. It’s 2008, and Leclair responds to an offer from a little-known Chinese businessman to buy the Swedish automaker, owned by Ford. The entrepreneur, Li Shufu, had a company with less than a share of Volvo’s sales and a flagship model, King Kong, almost unknown outside Of China. He was shown the door to the “Glass House,” Ford’s iconic headquarters near Detroit. According to two other people at the meeting, Ford’s Leclair did not respond to requests for comment on the episode. Fast forward to 2021 and Li Shufu’s company, Zhejiang Geely Holding Group, is one of the best-selling automakers in the world’s largest automotive market. It controls only Volvo Cars, but also an organization of global car brands and a significant share of the German market. The giant Daimler AG, the manufacturer of Mercedes-Benz. These names are now part of its plans for a revolution in the automobile. Geely is preparing Volvo for the board of the Stockholm Stock Exchange Nasdaq as a direction for long-term transport: a direction in which cars are components of an electrified network of mobility services, driving, connecting to others and, like cell phones, generating a network of knowledge and new business opportunities. It’s a more glimpse of Silicon Valley than Detroit, where classic automakers around the world are suing the giant: Tesla Inc. Li Shufu and his advisers, however, convinced Ford to perform component tactics with Volvo in 2010 for $1. 8 billion. It was the first in a series of deals, employing brands such as Lotus, Smart and London Electric Vehicle Company to shape a network he calls a “larger circle of friends” across all industry segments. Li Shufu sees them as building blocks for Geely to compete in the long term where cars are not vehicles, but “service providers,” he told Reuters in his control suite at Geely’s headquarters in Hangzhou, eastern China. In this business model, cars will be obtained by subscription and will offer invoices and applications for the car, update their own software and create opportunities in the same way as cellular operating systems evolved through Apple Inc. and Google. “We’re looking to create an automotive ecosystem for Android,” he said. Li Shufu, 58, recently followed a foreign call, Eric, because he liked sound. He traced from a remote fishing village in eastern China through dirty factories to the center of the global auto industry. His subordinates still call him president. Li. This account of his evolution into one of the industry’s top singular disruptors is found in interviews with Li Shufu himself, other executives and business advisors, as well as rivals and executives of corporations in which Geely has invested. of the initial bets, on corporations such as flying cars and helicopter taxis, to prepare for the new era of the automobile. In addition to the vehicles, Geely owns a Danish bank, a startup that develops vehicle control software technology, and Geespace, a China-based company that was given the green light from Beijing this year to make low-orbit satellites that will be in sight. autonomous machines from the sky. The scale of its investments, which span Europe, Southeast Asia, China and the United States, is unique among Chinese automakers. When asked about his role, some of Li Shufu’s rivals said his prestige as an industry newcomer gives Geely a prospective advantage that is unaffected by a giant network of gasoline-related suppliers, for example, said a Toyota Motor Corp engineer, who requested anonymity: this makes it less difficult for the transition to a virtual industry. “Among classic automakers, Geely has a more complicated vision for the long-term mobility,” said Bill Russo, director of the board of Automobility Ltd in Shanghai and a former Chrysler executive. -game maker. “ But Li Shufu’s ambitions face increasing challenges. To achieve this vision, executives from various competitions say they want to believe in their own Chinese-branded cars. “Geely’s biggest challenge is its name, in component because of its beyond as an entry-level cheap car lopass,” said a Honda Motor Co executive. “How does Geely go from that to an Apple-like lopass?they are suffering with this, however, it is a big challenge for Geely. “ And Li Shufu is evolving in a tense global climate. Its strategy of building varied alliances around the world has become imaginable through the last 15 years of openness to generation-sharing and marketing collaboration. Today, the superpower rivalry between the U. S. USA And China has led to a bitter industrial war, and Washington and its allies are blocking the expansion of China’s big tech companies. The Chinese businessman is discouraged and says that his foreign investments are a map of opportunities. “All roads can lead to Rome,” Li Shufu said, “but what is the right way and which is the fastest?” Like many other corporations in China, Geely wishes to stay on the song with statements by President Xi Jinping, who has called for a desire to publicize what he calls “common prosperity. “In June, ahead of the centennial of the Chinese Communist Party government, Geely issued a press release delivering Geely’s Common Prosperity Initiative to help workers in the city of Ningbo, where the company has several facilities. Li Shufu has been a member of some political bodies in China; in the past he was a member of the Chinese People’s Political Consultative Conference, a leading political advisory body; and was a delegate in March this year to the National People’s Congress of China. it largely passed parliament. “SOFAS ON WHEELS” The 3rd of 4 siblings born to farmers in a fishing village called Luqiao, Li Shufu’s business has its roots in the business boom of the mid-1980s, led by the economic reforms of then-Chinese leader Deng Xiaoping. photography of refrigerators and cars produced before you had the mandatory documents. The opportunity first presented itself when he went to take a top-notch graduation photo in the early 1980s. Seeing the line of his companions outdoors in the village studio meandering around the block, he harassed the photographer to learn it. Then, Li Shufu said, he borrowed 120 yuan from his father, about $70 at the time, five times the average consistent with his province’s rural source of income, bought a Chinese Seagull camera, got on a motorcycle and set up the first cell phone studio in his village, charging 0. 48 yuan in keeping with the portrait. With the cash pouring in, he said he had experimented with recovering appliances and casting metal mining parts, started making refrigerator parts, and in 1986, at the age of 23, registered the company that became Geely. Their village has now been absorbed through Taizhou City. The department stores of familiar devices in a domain that extends like Wenzhou have diversified from trades such as the repair of fishing boats to the manufacture of lighters, belt buckles and eventually motorcycle and car components. In the early 1990s, Li Shufu looked at a mutilated motorcycle brought to his factory, saw how undeniable it was mechanically and for making bicycles, according to his official biographer in Geely. Soon he dreamed of cars. He dismantled existing models to see how they worked, and quietly made a car factory and made primitive prototypes, the biographer told Reuters. The first model, the Geely Haoqing, was completed in 1997 and was a disaster. Its engineers had not waterproofed it and torrents erupted into the cabin when it conducted a leak test. In order to advance a strictly state-controlled industry, Li Shufu needed that of the Communist Party. In 1999, the year Tesla boss Elon Musk sold his online publishing startup, Li Shufu convinced a promising Communist Party official to grant him an official license to make cars in China, saying they weren’t so confusing to produce: they were just “two four-wheelers. “sofas,” he said. His factory would charge nothing to the state, he remembers telling the official, “Give me at least a chance to fail. “ Reuters may simply not find out this account, but the following year, the waterproofed Haoqing was deployed in giant quantities in showrooms. CHANGE OF PLANS Geely will soon promote a few hundred thousand raw, ready-to-use cars a year, models with bumpers that tended to give way after a few years, but Li Shufu was targeting the global market. Geely displayed one of his models in the lobby of the Cobo Showroom in downtown Detroit at the 2006 Auto Show, with a view to building a factory and sales network in the United States. In March 2007, an organization of potential U. S. funders met at Geely’s headquarters in China to discuss how to set up a plant in the United States. Li Shufu announced that he had a course. “He said, ‘I have a new plan,'” said one of those present, who requested anonymity. “We wondered if Volvo could be on sale. “ There was an embarrassing silence. Li Shufu, who declined to comment on this edition of events, told investors it would take too long to design cars that comply with U. S. protection and emissions regulations. It will be a faster way to win the generation and an established name. Initially, Volvo was not for sale: Li Shufu left through Ford’s Don Leclair at their meeting. But when the global currency crisis hit U. S. automakers. In the U. S. , Ford set about preserving its core business and parted ways with Volvo. “We chose to sell a mythical logo to a wonderful new owner,” a spokesperson said. In 2010, Geely increased the deal’s budget. Most came here in the form of subsidized, low-interest loans from the Chinese cities of Chengdu, Daqing and Shanghai’s Jiading district, the company said. Geely then built Volvo factories in the first two cities and a Volvo generation center in the third. Other automakers, including Tesla and Ford, also got assistance, in the form of billions of dollars in low-interest loans that year as a component of the U. S. Advanced Technology Vehicle Manufacturing Loan Program. A bailout after the global currency crisis. Meanwhile, the Chinese auto market is booming. And Volvo, which was operating at a loss when Li Shufu took over, in the dark. Geely and Volvo executives said they have made Volvo successful primarily by strengthening its presence in China, sharing parts and suppliers and coming. even non-unusual platforms. A DISADVANTAGE The year Geely bought Volvo, Tesla became the first American automaker to sell its shares to the public since Ford in 1956. Based in Palo Alto, Tesla owned a two-seater electric sports car, which Musk called “a cursed generation velociraptor. “saying it is in a position to revolutionize the way Americans buy and drive cars. Li Shufu also saw the desire to move to electricity. Geely and Volvo established a joint generation center in Gothenburg, Sweden, in 2013 and developed the hybrid and electric vehicle corporations Lynk a few years later. But Li Shufu and his lieutenant Daniel Li, the executive leader of Geely Holding, faced obstacles. Tesla’s likes, subsidized through venture capitalists eager for the next big thing, can get the best valuations without generating profits, making it easier for them to raise capital. Investment fund investors are tasked with reducing the dangers to achieve solid returns. Tesla responded to requests for comment for this story and made a full-year profit for the first time last year, but its market price rose from $34 billion in 2016 to a high of $834 billion in January. Since 2011, Geely’s publicly traded company in Hong Kong, a subsidiary of Geely Holding Group, has reported net profit during the year, averaging 5. 19 billion yuan or $800 million at today’s rate. Its market price is about $35 billion. The way forward, Li Shufu decided, is to mix the resources with classic car manufacturers, known in the industry as original appliance brands (OEMs). “If the brands of classic devices (. . . ) they wouldn’t invest in new technologies and trends, we would die. But if each and every OEM made massive investments on their own, we wouldn’t either,” Daniel Li, chief executive of Geely Holding, told Reuters, “We want to make those investments in a smarter and more collaborative way. “ This image reflected in the origin of some other li Shufu bet. “CIRCLE OF FRIENDS” He knew Daimler AG, a company whose roots go back to the world’s first gasoline-fueled car in 1886, as a key candidate for his “circle of friends. “But Geely’s boss knew that if he knocked on Daimler’s front door, he would be taken seriously, two Geely resources said. Therefore, starting in October 2017, Geely began to take a silent stake in Daimler, as Reuters had reported in the past https://reut. rs/3qD9uTX. Using Hong Kong shell corporations called Tenaciou3, Miroku and Fujikiro, as well as conscientiously structured derivatives, bank financings and inventory options, Geely remained in the shadows until the following February. He then stunned the automotive world by saying he was Daimler’s largest shareholder, with a 9. 69% stake charging around $9 billion. Asked where Geely was given the money, a user close to the matter said he bought Daimler shares and used them as collateral for a loan to buy more, a point Reuters might not confirm, Li Shufu said in an interview published in People’s. Daily at the time Geely only used offshore budget to execute the deal. The move sparked fear in Germany, where the government was wary of Chinese companies’ interest in national champions and their technology. A Geely executive organization led by Li Shufu presented a four-day diplomatic excursion to calm the waters. Meeting with Daimler’s most sensitive top brass, government officials and lawmakers in Berlin and Stuttgart, Geely’s team said it was looking for synergies, not dominance, Li said. Their interest in Daimler is not about economies of scale, they said, but the urgent need for classic automakers to shape joint ventures and split the burden of new technologies. At some of the meetings, Li Shufu presented his concept of piles of patented mini-satellites in low orbit as a more accurate global positioning formula for autonomous cars, Li said. Daimler and the German Finance Ministry declined to comment on the meetings. Since then, Germany has lowered the selection threshold for purchases of shares in German through non-Europeans; Last year, it blocked the acquisition of a radar and satellite generation company through a Chinese state-controlled missile maker. After the trip, Daimler first introduced itself to allow Geely to purchase its Smart logo from small, troubled city cars. Li Shufu was looking for more. In September 2018, at a luncheon at the Mercedes-Benz Museum with CEO Dieter Zetsche, the two men agreed to form a 50-50 joint venture to turn Smart into a network of electric urban conveyors, two other people close to the assembly said. declined to comment on this article. Since then, Geely and Daimler have agreed to several new joint investments: a premium ride-sharing service in China called StarRides; a super-efficient gasoline engine for hybrid cars; and participates in the German start-up of electric flying taxis, Volocopter. Geely also stores its electric vehicle platform technologies, origin chains and factories with Daimler, while the German logo and sales network to market new Smart models. Car production is just one of the profit resources geely is targeting. Another will be the sale of non-traditional cars, such as car subscription services, which will allow car owners to earn cash by lending their cars when they are not them, Li. Shufu and Daniel Li told Reuters. As a first step, Geely is already implementing a subscription style in Europe for its Lynk hybrid SUVs this year. NEW SENSITIVITIES As Li Shufu enters the era of autonomous cars, he also enters more delicate terrain. The still incipient box is complicated, because the protection of passengers is still assured and also because the generation passes through spaces with implications for national security. “You may be wondering why Volvo and Geely are aggressively selling their self-driving generation now. “Li Shufu said: “If you need to live up to Volvo’s traditions and protection standards, we can only call it autonomous driving generation when other people can turn a blind eye and fall asleep in an autonomous car with one hundred percent guaranteed protection. In the face of the slow and erroneous connectivity and vehicle positioning capability of existing cars, Li Shufu needs to use satellites in low orbit: he said that the generation deserves to be able to position and drive a car with a margin of error of a few millimeters. To be fast enough for security, satellite generation would want to complement others, adding 5G cellular signals, radars and virtual cameras, said William Malik, a cybersecurity expert at Trend Micro Inc. As satellite generation approaches, Geely could also face a U. S. ban. USA To export area generation and satellites to China. USA. USA It is expanding industry restrictions on Chinese tech companies. Geely said he does comment on political issues. But Li Shufu says he believes global corporations are moving forward and seeking global integration. “We can do business in combination and maximize synergies within an industry,” he said. “That’s why I’m opposed to breaking ties. “ (Additional reporting via Kevin Yao in Beijing and Michael Nienaber in Frankfurt; editing via David Clarke and Sara Ledwith)