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Volvo Cars hopes to raise $2.9 billion in its stock IPO

STOCKHOLM/LONDON — Geely-owned Volvo Cars plans to raise 25 billion Swedish crowns ($2.9 billion) through an initial public offering (IPO), the Swedish carmaker said on Monday of what would be one of Europe's biggest listings this year. Volvo said it will list on the Nasdaq Stockholm stock exchange this year and that Chinese owner Geely Holding would remain its biggest shareholder. In 2018, Volvo Cars and Geely, which also owns an 8.2% stake in Sweden's Volvo Trucks, postponed plans to float shares in the Swedish carmaker, citing trade tensions and a downturn in automotive stocks. "Volvo Cars believes that its unique structure and focused strategy makes it one of the fastest transformers in the global automotive industry, with mid-decade ambitions dedicated to electrification, sustainability and digitization," the Swedish company said in a statement. Like a number of other carmakers, Volvo has committed to shifting its entire car range to fully-electric models by 2030. Volvo said is targeting an operating margin of between 8% and 10% by 2025. It is also aiming for annual sales of 1.2 million cars, up 56% from the 770,000 it sold in the 12 months to June 20 this year. Electric push The carmaker said it expects 50% of sales to be fully electric cars by the middle of the decade and that 50% of sales will be made online rather than in dealerships. Volvo Cars said earlier on Monday that its sales in September fell 30% from a year earlier, dented by the global components shortage. Sources told Reuters last month that Geely was in advanced discussions with banks to list the Swedish company in the coming weeks, aiming for a valuation of about $20 billion. Volvo Cars had previously said it was considering a Stockholm listing in the second half of 2021. A Volvo spokesperson on Monday said that the company had no comment on valuation or on how much of the business would be sold in the IPO. "There will be further information published in connection with the prospectus," she said. Electric-car maker Polestar, which is owned by Geely and Volvo, last week said it will go public by merging with a U.S.-listed special purpose acquisition company (SPAC) backed by billionaire Alec Gores and investment bank Guggenheim Partners at an enterprise value of $20 billion. Related video: This content is hosted by a third party. To view it, please update your privacy preferences. Manage Settings. 2022 Volvo C40 Recharge charging

Volvo Cars plans $20 billion stock IPO this month, sources say

STOCKHOLM — China's Geely Holding is in advanced discussions with banks to list its Volvo Cars unit in the coming weeks, three sources told Reuters, in what is expected to be one of Europe's biggest initial public offerings (IPOs) this year. Volvo Cars is aiming for a valuation of about $20 billion in the planned Stockholm listing, the sources said, with one saying the launch was penciled in for the end of September. Goldman Sachs and SEB are leading the transaction, while other banks including BNP Paribas, Carnegie and HSBC are also involved in the deal, the sources added. Volvo Cars declined to comment. Geely did not immediately respond to an emailed request for comment outside normal business hours in China. SEB and Goldman Sachs declined to comment. The other banks were not immediately available. Geely, which bought Volvo from Ford more than a decade ago in the biggest acquisition by a Chinese firm of a foreign car maker, sought to float shares in the Swedish firm in 2018 but then pulled the deal citing trade tensions and a downturn in automotive stocks. Traditional carmakers have fallen out of favor in recent years, as Tesla has risen to be one of the world's most valuable companies, putting the focus on electric vehicles. Many European firms have pivoted toward the electric sector, including Volvo, which aims to only make fully electric cars by 2030 and owns a 49.5% stake in electric car maker Polestar. Valuation Gothenburg-based Volvo Cars aims to secure a valuation of roughly $20 billion, one of the sources said, while another mentioned a possible range of $20 billion to $30 billion. A third source suggested a $16 billion valuation was more realistic, citing the firm's revenue outlook. A $20 billion valuation for Volvo would be equivalent to six to seven times its earnings, a level some analysts say is high although it would put it in line with rivals Daimler and BMW. Tesla's valuation is more than 70 times that. NordLB's automotive analyst Frank Schwope estimated a valuation range of $10 billion to $15 billion. "The strong margins seen in the first half of 2021 are unlikely sustainable as the market benefited from a strong post-pandemic rebound that is unlikely to continue," Schwope said. For Geely's founder Li Shufu, who bought Volvo for $1.8 billion, the listing is a milestone on the road to transport of the future, where cars are part of an electrified network of mobility services generating data and business opportunities.

Volvo leads and Mini fails in JD Power's Tech Experience Index

New cars are basically rolling computers. Everything from the engine to the infotainment runs on a series of ones and zeros, and a lot of that technology requires input from the driver. So it's no surprise that JD Power has a study designed specifically to discern which bits of tech drivers love and which bits they loathe. "New technology continues to be a primary factor in the vehicle purchase decision," says JD Power's Kristin Kolodge, executive director of driver interaction & human machine interface research. "However, it’s critical for automakers to offer features that owners find intuitive and reliable. The user experience plays a major role in whether an owner will use the technology on a regular basis or abandon it and feel like they wasted their money." The J.D. Power 2020 U.S. Tech Experience Index (TXI) Study found that Volvo owners are happiest with the technology packed inside their vehicles, followed by BMW and Cadillac, all brands that JD Power classifies as premium. The highest-rated mainstream brand is Hyundai, followed by Subaru and Kia. As was the case with the organization's Initial Quality and APEAL studies, Tesla's numbers aren't officially included because they are the only automaker that has not granted JD Power approval to contact its owners in states that require it. Tesla's projected score of 593 would have put it in second place, right behind Volvo's score of 617. The lowest-ranked brand in the TXI Study is Mini, with Porsche right behind. Diving a little bit deeper, JD Power's findings suggest that the technologies new car buyers care most about are related to helping them see their surroundings better. Camera systems, including rear-view mirror cameras and ground-view cameras, scored highest in five of the six satisfaction attributes measured in the study. The technology that owners could really do without? Gesture controls. Owners who answered JD Power's survey say they don't use gesture controls much at all after initially trying them, and they don't really care if their next vehicle has them. We have to wonder if those responses might be what kept BMW out of the top spot. The TXI Study also found that owners are split on automated driving helpers, like lane-keeping assist and automatic emergency braking. JD Power suggests that owners may need more training on those systems before they learn to trust them. Related Video: This content is hosted by a third party. To view it, please update your privacy preferences.