AUTO MOBILE UPDATE

Volvo Cars revs up pursuit of listing

Swedish automaker seeks to operate independently from Chinese parent

TAKAYUKI KATO, Nikkei staff writer

Volvo Cars CEO Hakan Samuelsson © AP

FRANKFURT, Germany -- Volvo Cars continues accelerating toward a possible initial public offering, flush with 5 billion Swedish kronor ($545 million) in equity financing and record-high sales under Chinese owner Geely.

Following two bond issues earlier in 2016, the premium-car maker sold convertible preference shares to institutional investors in Volvo's home country of Sweden, including two pension funds and insurance company Folksam. Volvo looks to become less financially reliant on Chinese auto enterprise Zhejiang Geely Holding Group, which bought the Swedish automaker in 2010 and owns all of it.

The share sale was "another step towards Volvo Cars' long-expressed ambition to act as a listed company," the automaker said in a news release Dec. 20.

An IPO would mark the first stock market listing for Volvo Cars, originally the passenger-vehicle division of Gothenburg-based Volvo Group, Sweden's biggest manufacturer. America's Ford Motor bought the division in 1999, leaving listed Volvo Group to focus on divisions such as trucks, construction equipment and engines. Volvo Cars retained the brand but went its own path.

The automaker has received funding from Geely, but kept core functions such as research and development in Sweden, letting Volvo Cars retain "management independence," CEO Hakan Samuelsson said.

Volvo's struggling business has recovered under Geely, and the Swedish company has begun production at a new Chinese auto plant. It expects record highs both in vehicles sold and in sales revenue for the fiscal year ended Dec. 31.

The automaker has also made alliances of its own, including tie-ups in automated driving with Swedish autoparts maker Autoliv and U.S. ride-sharing company Uber Technologies. An IPO would seal Volvo Cars' independence from Geely.