Give Me a Chance to Fail
In 1999, a Chinese entrepreneur who was not legally allowed to build cars asked a government minister for permission
In 1999, a Chinese entrepreneur who was not legally allowed to build cars asked a government minister for permission to try. His pitch was not that he would succeed. Standing in front of the official during an inspection of his factory, Li Shufu said: “Please allow private entrepreneurs to pursue their dream of making sedans. If I fail, please give me a chance to fail.”
At the time China did not licence private companies to manufacture passenger cars. The industry belonged to state-owned firms and their foreign joint-venture partners. Li was an outsider asking only for the right to lose his own money on his own terms.
Two decades later, the man who begged for the chance to fail owned Volvo, and had turned it into one of the most successful acquisitions in the history of the car industry. The people who assumed he would ruin it included Ford, the Swedish press, Volvo’s own workers, and much of the global motor industry.
The Man Who Asked to Fail
Li Shufu started with next to nothing. In 1982, with 120 yuan from his father, he bought a camera and walked the streets of Taizhou taking portrait photographs for money. He moved into refrigerator parts, then motorcycles, accumulating capital and a reputation as a relentless operator with no respect for the idea that certain industries were closed to people like him.
Cars were closed to people like him. To get in, he bought a stake in a struggling car factory attached to a prison in Sichuan, largely to inherit its manufacturing permit, because the government would not grant one to a private start-up. In 1998, Geely built its first car before it technically had approval to build cars at all.
His persistence worked. In 2001 the Geely Haoqing was added to the official catalogue of approved vehicles, making Geely the first private Chinese company cleared to build sedans. The regulator had, in the end, granted the chance to fail. Geely spent the next decade building cheap, cheerful, low-cost cars and a reputation to match.
The Deal Nobody Believed In
By the late 2000s Ford wanted out of Volvo, and the timing tells you how the brand was seen.
Ford had bought Volvo Cars in 1999 for $6.45 billion, placing it in a portfolio of European prestige marques alongside Jaguar, Land Rover and Aston Martin. The investment never paid off. Ford struggled to make Volvo profitable, and when the financial crisis hit, it began shedding its luxury brands to raise cash and refocus on its core business.
In 2010 Ford sold Volvo to Geely for $1.8 billion. Ford had paid $6.45 billion and sold for less than a third of that, taking a loss on the brand estimated at around $5 billion. Nobody was fighting over Volvo; it was a problem Ford was relieved to hand to the one bidder willing to take it.
The reaction to the buyer was close to unanimous, and it was scornful. Geely made cheap cars, so the logic ran, and a Geely-owned Volvo could only become a cheaper Volvo. Existing Volvo owners in China complained online that their cars would soon be built domestically and sold at what they called cabbage prices. Volvo’s own Swedish union flew to Beijing to ask China’s national labour federation to help block the deal. Almost nobody tested whether the assumption was true. They simply believed that a cheap-car maker could only cheapen what it touched.
Volvo Is Volvo, Geely Is Geely
What Li did next is the reason the deal worked, and it was the opposite of what everyone feared.
Rather than fold Volvo into Geely, he kept the two apart. Volvo retained its Swedish headquarters, its engineers, its safety obsession, and the autonomy to run its own strategy. Geely supplied capital and access to the Chinese market and otherwise let Volvo remain Volvo. The philosophy became a well-worn phrase inside the group: Volvo is Volvo, and Geely is Geely.
That autonomy let Volvo do the expensive, patient work a starved brand under Ford could never afford, and Geely paired it with two things Ford never provided: deep capital and a way into the Chinese market.
The engineering foundation was a new vehicle architecture called SPA, or Scalable Product Architecture. Rather than engineer each model separately, Volvo built a single flexible platform it could stretch across saloons, estates and SUVs, sharing the enormous development cost of one architecture over an entire range. The XC90 launched on it in 2014 and became the car that announced Volvo was serious again, followed by the S90, the XC60 and the rest of the modern line-up. A brand that had been making do with aging, Ford-era underpinnings suddenly had a modern base to build a decade of cars on.
Geely then plugged that revived product into the largest car market on earth. Volvo built factories in China, sold into a market Ford had never cracked with the brand, and used Chinese manufacturing to serve the world. Sales climbed past 500,000 cars for the first time in 2015 and kept rising, roughly doubling over the Geely decade.
Volvo also moved early on electrification, committing to an all-electric future years before most legacy rivals treated it as urgent. That bet was only possible because the company had the capital to make it and the independence to choose it, two things a cash-strapped division inside Ford would never have been granted. The brand that was supposed to be hollowed out was instead handed the resources to rebuild itself.
The clearest symbol of the reversal is the S90, Volvo’s flagship saloon. It is built in one place on earth, Daqing, an oil town in the far northeast of China, and shipped to Europe by train across more than 10,000 kilometres of Russia. A Chinese-built Volvo, exported to the continent that was certain China would ruin the brand, sold at full premium price.
Ten Times the Money
The judgment of the doubters can be measured, because Volvo went public.
In October 2021, Geely listed Volvo Cars on the Nasdaq Stockholm exchange at a valuation of roughly $18 billion. Geely had paid $1.8 billion for the whole company eleven years earlier. The asset that Ford lost around $5 billion on, and sold in relief, was now worth about ten times what the Chinese outsider paid for it.
The three numbers tell the story on their own. Ford paid $6.45 billion, ran the brand for a decade, and sold at a $5 billion loss for $1.8 billion. Eleven years after Geely bought it at that knock-down price, the market valued Volvo at close to $18 billion. The distance between what Ford fled and what Geely floated is the measure of how wrong the consensus was.
The Second Battle
The honest version of the story does not end on the trophy, because the fairy tale is under strain.
Volvo trades today at a market capitalisation well below its listing peak, closer to $6.6 billion. The company warned that 2025 would be difficult, and it was: gross margins slipped, software problems and model delays piled up, and the American market threatened complications. In 2025 Geely brought back Hakan Samuelsson, the 74-year-old Swede who ran Volvo through its earlier revival, to steady it again.
The pressure now comes from an unexpected direction. The Chinese EV industry that Geely helped build has become the most competitive in the world, and Volvo has to fight the same fast, cheap, capable rivals that are unsettling every Western carmaker. Having survived the fear that it would be cheapened by China, Volvo now has to survive Chinese excellence.
Li Shufu understood that fight early. He has spent years buying and building across the industry, from Volvo to Lotus to a large stake in Mercedes-Benz’s parent, on the conviction that no legacy carmaker survives the coming shakeout alone.
What the Doubt Was Worth
The Geely Volvo story keeps its value because the consensus against it was so total and so wrong.
Ford, a company built by one of the great industrialists in history, looked at Volvo and saw a loss to cut. The Swedish union looked at Geely and saw a threat to stop. Chinese customers looked at the deal and saw their cars about to be cheapened. Every group reasoned from the same assumption, that a cut-price outsider could only degrade what he bought, and every group was proven wrong by the same man.
Cheap buyers do not always add value; usually they do exactly what Ford and the union feared. The real lesson is narrower and more useful. A confident consensus is not the same as a correct one, and the more unanimous the certainty, the fewer people are actually checking it. A man once had to ask permission simply to attempt something everyone expected him to bungle, and he built a career, and an empire, out of being underestimated by people who never did the work to find out if they were right.
Sources
- Global Times: Geely Chairman Li Shufu — From an Adventurous Newcomer to an Industry Leader
- NBC News: Chinese Automaker Buying Volvo From Ford
- Fast Company: Ford Sells Volvo Car Brand to China’s Geely
- Reuters via Forex.com: Volvo IPO — Everything You Need to Know About Volvo Cars
- Bloomberg: Volvo CEO Hakan Samuelsson Warns EV Shift Will Kill Some Western Brands
