Geely, Volvo Debate Plan for Flagship Sedan

Li Shufu, the chairman of Zhejiang Geely Holding Group Co. and Volvo Cars, thinks the Swedish carmaker needs a big rear-drive luxury model for China. But Volvo management insists such a project would be a bad investment, Reuters reports.

The two sides have been skirmishing about a flagship car for Volvo since Geely bought the company three years ago.

Li contends that meeting Volvo's goal of doubling worldwide sales to 800,000 units by 2020 will require luxury cars for the Chinese market with the pizzazz that wealthy customers want, according to Reuters. But Volvo's management argues it would be a bad idea to abandon the brand's global image of safety and understatement.

Swedish executives claim it makes little economic sense to invest the time and cost required to develop a large rear-drive flagship car and establish it in China's luxury market. Reuters says they are pushing to satisfy Li's vision far more quickly and inexpensively with a stretched version of the company's existing S80 large sedan.

"Showing off has never been part of the Volvo brand," declares CEO Hakan Samuelsson to reporters in China. He also opines that Chinese consumers are becoming more subdued about flaunting their economic status.

Reuters says Volvo is scheduled to meet in Sweden with Li later this week to review the carmaker's product plans, including a resolution to its flagship vehicle.