Li Shufu

Li Shufu is a Chinese billionaire entrepreneur, best known as the founder and chairman of Zhejiang Geely Holding Group. Often dubbed “China's Henry Ford,” Li has masterfully navigated the global automotive industry, transforming a modest domestic carmaker into a sprawling international powerhouse. His story is a masterclass in ambition, long-term vision, and shrewd deal-making. Li is celebrated for his audacious acquisitions, most notably the purchase of Sweden's iconic Volvo Cars from the Ford Motor Company in 2010 and his surprise move to become the largest single shareholder in Germany's Daimler AG (now Mercedes-Benz Group) in 2018. For value investors, Li Shufu is a fascinating case study in identifying undervalued, high-quality assets, injecting them with new capital and strategy, and patiently waiting for their true worth to be recognized by the market. His career demonstrates a unique ability to bridge Western engineering heritage with the dynamism of the Asian market.

Li Shufu’s journey is the quintessential rags-to-riches tale. He began his entrepreneurial career not with cars, but with refrigerator components, using a small loan from his father in the 1980s. This early success funded his next venture into manufacturing motorcycles, where he also found considerable success. However, his ultimate ambition lay with four wheels. In 1997, against considerable odds and with no government support, Li founded Geely Automobile. His vision was simple: to build affordable cars for ordinary Chinese families. The company’s early models were often derided as basic and unrefined, but they were cheap and reliable, perfectly meeting the needs of a burgeoning market. This focus on providing value to the mass consumer allowed Geely to build the scale, cash flow, and manufacturing expertise necessary for its future global conquests. It was this foundation, built on discipline and a deep understanding of market needs, that would later fund his legendary international deals.

Li's global strategy mirrors the core tenets of value investing: buy quality assets when they are unloved and hold them for the long term.

In 2010, the global auto industry was still reeling from the financial crisis. Ford, desperate to shed non-core brands to focus on its own survival, put Volvo Cars up for sale. The Swedish brand was respected for its safety and engineering but was losing money and seen as a corporate orphan. Li Shufu saw what others missed: an iconic brand with a loyal customer base and world-class technology that was simply starved of capital and strategic direction. Geely acquired Volvo for $1.8 billion, a fraction of what Ford had paid for it a decade earlier. Li’s post-acquisition strategy was brilliant in its simplicity:

• Autonomy: He kept Volvo's management and operations in Sweden, preserving the brand's unique culture and engineering integrity.
• Investment: He pumped billions into new product development and technology, something Ford had been unwilling to do.
• Synergy: He provided Volvo with unprecedented access to the massive Chinese market.

The result was one of the most successful turnarounds in automotive history. Volvo flourished under Geely's ownership, launching a slate of award-winning vehicles, returning to robust profitability, and re-establishing itself as a leader in the premium car segment.

Li's 2018 acquisition of a 9.7% stake in Daimler was another bold, contrarian move. He secretly built up his position through complex financial instruments, catching the market completely by surprise and becoming the German titan's single largest shareholder. His motive was strategic and forward-looking. Li recognized that the future of the automotive industry would be defined by electrification, connectivity, and autonomous driving—areas where traditional carmakers needed to collaborate to compete with tech giants. The stake was a ticket to the table, aimed at fostering a technology-sharing alliance between Geely's ecosystem and Mercedes-Benz's engineering prowess.

For the ordinary investor, Li Shufu’s career offers several timeless lessons:

• Look for Hidden Value. Like Benjamin Graham, Li looks for “cigar butts”—assets with one good puff left in them. He excels at identifying strong brands and companies that are temporarily struggling due to poor management, lack of capital, or being a non-strategic fit for a parent company. The Volvo acquisition is the textbook example.
• Play the Long Game. Li's investments are not short-term trades. He is a strategic, long-term owner who is willing to invest capital and time to allow a turnaround to fully materialize. He understood that rebuilding Volvo would take years, not quarters.
• Boldness Must Be Backed by Diligence. While his moves appear audacious, they are underpinned by deep industry knowledge and a clear strategic vision. He doesn't take uncalculated risks; he takes bold, well-researched steps toward a long-term goal.