THE PROSPECTS OF INTERNATIONAL ACQUISITIONS IN CAR INDUSTRY DURING THE GLOBAL ECONOMIC CRISIS - THE CASE OF GEELY VOLVO

Significant technological, social and economic changes on the global level marked the beginning of the 21st century. Growing importance of Chinese economy stands out as one of the most important among these changes. Accelerated economic development of China was first based on FDI inflow and the export of low-cost less technology intensive products. However, a gradual alternation to Chinese economic policy and the growth of outward FDI followed by a global breakthrough of some Chinese companies operating in technology intensive industries (Huawei, Lenovo, Mindrey, Haier etc.) has been marked in the past few years. Further economic development of China will to a large depend on the positioning of Chinese car manufacturers. In this paper the stress will be put on high technology intensity in car industry, on its global character, high concentration within the industry and on market saturation in developed countries due to global economic crises. Basic characteristics of automotive industry and its development will be considered regarding prolonged economic crisis. Current local character of Chinese car manufacturers and its going global prospects will be observed. In order to become global players Chinese car manufacturers could implement the acquisition strategy of some key competitor from developed countries. Chinese car companies aimed at relatively small targets in the previous period because they were inexperienced in acquisitions and restructuring management and tended to decrease risks. The last and the most important is the acquisition of Swedish Volvo by Chinese Geely. These are the companies significantly differing in the level of technology, corporate and national culture, brand perception and geographic orientation of business operations. Potential risks that follow these differences as well as potential synergetic effects, supposing that the acquisition process is properly managed, will be considered in the paper.