Volvo Cars is inching closer to a potential initial public offering (IPO), according to a report by Reuters. “We are looking at the possibility of doing an IPO before the end of the year,” said Volvo Cars CEO Hakan Samuelsson in an interview with the publication.
The Swedish carmaker previously was in talks with Geely Auto for a full merger, but that plan was scrapped due to economic uncertainty at the time. Instead, both companies agreed to a deeper collaboration in the areas of vehicle platforms, powertrains and other technologies.
Volvo plans list shares on the Nasdaq Stockholm stock exchange, allowing it to raise cheap capital from enthusiastic investors in order to further development of its vehicles. Several automakers, including start-ups, have done the same in other countries as well.
Earlier this month, Volvo’s Tech Moment conference detailed several key technologies and features that it plans to implement on its cars in the next few years. However, the brand is also aiming to provide additional services to increase profitability, including offering insurance and vehicle subscription payment plans (Care by Volvo) directly to customers.
“The whole vehicle business will be recurring revenue,” Samuelsson said. In specific regions like Europe, Volvo will look to update its retail operations so customers order their vehicles directly from the manufacturer, with dealers being paid commissions to deliver them. However, in countries like the United States, where there are laws protecting dealers, franchised retails will remain the norm.