Geely says it will stop building factories and start borrowing everyone else’s instead

Li Shufu, the billionaire chairman of Geely Holding Group and the man who bought Volvo Cars from Ford for $1.8 billion in 2010, has arrived at a conclusion that many of his peers in the global automotive industry have been slower to reach: the world has too many car factories, and building more of them is a waste of money. In a statement reported by Bloomberg and the South China Morning Post, Li said Geely would no longer construct new production facilities anywhere in the world, and would instead lean on existing plants, particularly those belonging to Volvo Cars, to manufacture its vehicles in overseas markets.

The declaration amounts to a formal strategy shift for China’s second-largest carmaker. Rather than purchasing land, erecting buildings, installing equipment, and hiring workforces in new markets, Li said the company would pursue partnerships, integration, and the revitalisation of existing capacity. The approach ...