One could say that partnering with Geely was one of the best things that could happen to Volvo. It could be said that there was initial skepticism about the partnership, but the two proved pundits wrong over the years. Both Geely and Volvo flourished over the past decade with both companies leveling up and gaining more resources to build even more advanced vehicles.

The two have been working together since 2010 and talks of a merger have been around for quite some time already. However, Volvo abruptly put the brakes on that this week. So why did the Swedish automaker put the merger plans on hold all of a sudden? There was one specific reason given by Volvo.

According to a Volvo spokesperson, it all boils down to the company potentially being listed in the Shanghai stock exchange. “In connection with this (Shanghai listing) Geely Auto cannot discuss a potential combination of the companies," said the spokesperson to Reuters. However, Volvo would resume talks with Geely, but only if the latter "ended its activities related to that".

Volvo delays Geely merger plans for one specific reason image

That's not to say that the relationship between the two automakers is rocky at the moment. Volvo simply stated their conditions for the merger. If Geely won't add Volvo in the Shanghai stock exchange, then the merger will more than likely push through. Should the opposite happen, the Geely-Volvo partnership could remain the same as it was. Given how both automakers moved up in recent years in sales and tech, the odds of Geely cutting ties with Volvo doesn't seem high.

Just before the coronavirus pandemic put most of the developed and developing world on lockdown, Volvo was enjoying a surge in sales and profits. Geely on the other hand was exploring more markets and has even found success here in the Philippines. With the easing of movement restriction movements worldwide, the two are expecting to see recovery not just for them, but also for the entire automotive sector.

"If the market recovers as we expect, we anticipate sales volumes to return to the levels we saw in the second half of 2019 and it is also our ambition to return to similar profit levels and cash flow," said Håkan Samuelsson, CEO of Volvo Cars.