SHANGHAI AUTO SHOW: Volvo unveils its vision for the S80 sedan

Forget the Star Trek-style bonnet, grille and headlight treatment. Universe is an appropriate name for Volvo's latest concept for an entirely different reason.

It's the first car conceived by the Swedish company under Chinese ownership, with influences from opposite sides of the world.

Unveiled at the Shanghai motor show, the Universe also delivers the large luxury car its new Chinese owners ordered when they took over the brand a year ago.

When Volvo was bought by Chinese car maker Geely, the heads of both companies had opposite views on what types of vehicles were important for the future of the Volvo brand.

The Chinese believed Volvo needed go more upmarket and compete with limousines from BMW and Mercedes-Benz – large luxury cars are big business in China and highly profitable – while Swedish management was focused on smarter, more fuel efficient small cars for Europe and te rest of the world.

The upshot is that both partners were right: Volvo is full speed ahead developing a new generation of small cars and it is also planning an executive sedan for the all-important Chinese market and beyond. Volvo is also planning to eventually build cars in China.

So the Universe concept is in some ways and overdue thank-you present to Geely for saving them from extinction – but it is not quite what the Chinese had in mind.

It is not a BMW 7 Series or Mercedes-Benz S-Class rival, it is the next category down – similar in size to the BMW 5 Series and Mercedes-Benz E-Class. The concept car didn't even have an engine – it had to be pushed into position onto Volvo's motor show stage.

"It is a design study with a big question mark on the end of it," said Duncan Forrester, head of public affairs for Volvo Cars in the UK. "The front end is very much designed with China in mind. But if it goes into production it will be a global car."

In a roundtable discussion with the media, Volvo president and CEO, Stefan Jacoby, said he did not believe Volvo needed a car as big as a BMW 7 Series.

"We know that space is important here in China, we see a lot of extended versions [of sedans], we have ourselves the S80 as an extended version here. [But] whenever we just extend the vehicle we lose a little bit of the fine design language."

Given that the Universe was the first concept car developed under the joint ownership of the company, Jacoby was again asked about how much freedom Volvo had from its Chinese parents.

"You know what? I have to disappoint you and I know you like to have the mystery of [Volvo] being owned by a Chinese company," he told the gathering.

"I'm wearing a white shirt, I'm wearing a tie, and I shave myself in the morning and I speak my language. I don't speak Chinese yet.

"Short story … you need to understand that the Chinese economy needs to invest their surplus which they are generating, not only in American bonds but also in proper investments, and we can appreciate this.

"The more China is getting integrated into the global economy, the better it is not only for the global economy, but also stabilizing political questions and integrating China more into the global world.

"Geely is not only a Chinese company it is also a Chinese non-state-owned company, it's an entrepreneur."

Jacoby said Geely were good business managers – and he reported to the board, not Geely hierarchy.

"I can tell you there is a lot of dynamic, there is extreme flexibility, there is a deep understanding about the automotive industry and the demands we have in our industry in respect of the investment and the returns for this investment, which are longer than they may be in other industries," he said.

"[That] is a big advantage, for example, compared if you would be owned by private equity, which actually expects in a very short term the right return.

"Our industry is depending on the [model] cycle. We expect a return in a cycle of five to seven years.  So we have here a huge understanding of the specifics of the industry."

He said the Chinese board had so far allowed the Swedish company relative freedom to do what it does best – in much the same way that Jaguar and Land Rover have blossomed since being severed, also from Ford ownership.

"What I like most is actually that we are running both Geely and Volvo independently from each other," he said. "We are serving in different markets, we are serving also to different segments, and to mingle that up would make no sense because Volvo is a global brand and … is serving the upper scale segment, and we have only limited opportunities for shared technology.

"So that actually offers us a lot of opportunities to run parallel to conquer our market segments. We are of course looking for opportunities also to work together where it makes sense."

He also said that while Volvo returned to profitability last year it still was not "weather-proof" and needed more time to build its equity.

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