China Dinner: Insights into setting up Volvo and Polestar factories in China - 6 October 2021

China Dinner: Insights into setting up Volvo and Polestar factories in China - 6 October 2021

After a long period of virtual events, the Flanders-China Chamber of Commerce – with the support of Flanders Investment and Trade – organized an informal dinner on 6 October with Mr Koen Sonck, who talked about his experience of setting up a Volvo factory in Chengdu, where he is now based, and a Polestar factory in Chongqing.

Ms Gwenn Sonck, Executive Director of the Flanders-China Chamber of Commerce, introduced the speaker.

Mr Kurt Vandeputte, Chairman of the Flanders-China Chamber of Commerce, moderated this first live event since the start of the Covid-19 pandemic, also sharing his views and concluding the event.

The speaker at this webinar, Mr Koen Sonck, is a master in electro-mechanic engineering from Ghent University. In the period from 1993 to 2010 he was subsequently Production Supervisor, Design & Test Engineer, Vehicle Evaluation Manager and Q superintendent at Volvo Cars Ghent. From 2010 to 2015 he was Plant Quality Director at Volvo Cars Chengdu (China), the first new Volvo Group car plant in 40 years. From 2015 to 2018 he was Global Quality Implementation Director & Senior Specialist Product Audit at Volvo Car Group (Sweden-Belgium-China-U.S.-India). From 2018 to 2022 he was Head of Quality & Deputy General Manager at Polestar Chengdu (China) and from 2021 until 2024 he is Head of Quality & New Model Launch and Deputy General Manager at Polestar Chongqing (China).

His duties at the Volvo Car and Polestar Greenfield plants include: Supporting the Volvo and Polestar manufacturing growth plan with leadership based on knowledge, experience and company culture. He is also part of a small core team of long-time company experts (ISE) building, starting-up and running the new Volvo and Polestar plants, and optimizing the general plant design towards the best in class and ideal plant concept. He also helped develop and implement the quality infrastructure, processes and systems to produce world class quality cars in a lean and efficient way, based on the EU model, but tweaked to eliminate overshoots and combine them with local strengths. He is also involved in recruiting, training and leading the plant quality organization, and secure the company's brand identity in the new plant and organizations.

The following cars were launched and produced successfully: S60L (2013); XC60 (2014); S60i (2015) (The first premium car build in China that was exported to U.S.); S60L hybrid (2015) (The first hybrid built in China); Lynk&co 01*, XC40*, S60 U.S. made and Polestar 1.

Mr Sonck's strong believes on how to grow and develop include: 1. Acquire first the basic skills; 2. Experience-based learning; 3. DIY at work and at home; 4. Be an expert in what you do; 5. Widen your area of expertise (do different jobs); 6. Become a trainer and coach; 7. Be innovative, be creative. In everything you do: create and accept, pass on no problems. The best quality is building right from the first time. Study and observe carefully: the difference is always in the details. In China it is mostly about methods and tools (machines).

Volvo Car Group is part of the Zhejiang Geely Holding Group (ZGH), a global automotive group based in the city of Hangzhou in south-east China’s Zhejiang province. The group was established in 1986 and launched its automotive business in 1997. ZGH consists of many well-known international automotive brands with global operations spanning the automotive value chain, from research, development and design to production, sales and servicing. Zhejiang Geely Holding Group is split into eleven divisions to maximize synergies and improve resource utilization.

Polestar – the guiding star – is an electric performance brand, determined to improve the society we live in. The focus is on uncompromised design and technology. Passion and emotion drive us, electricity and innovation drive our cars. Polestar's products are excellent, efficient and entertaining. In Polestar’s future, there is no room for shortcuts, excuses or compromises. We are all in, dedicated on our ambition. Guiding our industry forward through pure, progressive, performance. At Polestar, the sky is the limit. The Polestar 1 is a low-volume electric performance hybrid GT with a carbon fibre body, 609 hp, 1,000 Nm and an electric-only range of 124 km (WLTP) – the longest of any hybrid car in the world. The Polestar 2 electric performance fastback is the company’s first fully electric, high-volume car. The Polestar 2 model range includes three variants with a combination of long- and standard range batteries as large as 78 kWh, and dual- and single motor powertrains with as much as 300 kW / 408 hp and 660 Nm. In the future, the Polestar 3 electric performance SUV will join the portfolio, as well as the production version of the Precept, which showcases the brand’s future vision in terms of sustainability, digital technology and design.

Polestar is an independent Swedish premium electric performance car brand founded by Volvo Cars and Geely Holding in 2017. Polestar's main shareholders are Volvo Cars and Geely Holding. Polestar enjoys specific technological and engineering synergies with Volvo Cars and benefits from significant economies of scale as a result. The company is headquartered in Gothenburg, Sweden, and its vehicles are available and on the road in eighteen global markets across Europe and North America, and in China.

The Polestar 1 assembly plant in Chengdu has been built as the most efficient and environmentally responsible car factory in China. Reflecting the unique Polestar brand identity. Low-volume manufacturing, designed capacity 750 cars/year. 180 BC workers and 62 supporting WC, set up in a flat, agile organization where people take multiple roles. Integrated concept, 90,000 m2 in total with 110,000 m2 for future extensions. Includes experience center and special test track to enable test drivers and potential customers to evaluate the car to the extremes. The Polestar Chongqing plant is under construction.

The manufacturing fundamentals for building high quality cars in China are:

• Qualified people & teams, following

• Standardized work (with built in quality), building

• Right from me (not accept and pass problems), with the right level of

• Quality confirmation (on and offline) and

• Process validation

The concept of self control versus independent control: In a perfect world, self-controlling systems are sufficient to guarantee an OK product. In the real world, things do go wrong and people will compromise. In the real world, some level of independent control is needed. The independent control keeps the self control sharp and effective, it also helps to protect the customer as a secondary safety net. There needs to be a “healthy tension” between “self-control” and “independent control”. Healthy means also lean, no overshooting either way. The base is and must always be the self-controlling system.

Brand manufacturing DNA: Company Common systems and ways of working, optimized by benchmarking, continuous improvement, knowledge sharing, lessons learned; different plants cooperate and are part of a team with common DNA; no need to always reinvent the wheel.

Mr Koen Sonck's other insights about China include:

• I will make some generalizations, there are always exceptions

• The numbers do make a difference: bird nest versus bee hive, different rules apply

• Culture is 70% food, the other 30% is not what happened thousands of years ago, it is what was experienced by three generations: your own experiences, your parents' experiences and your grandparents' experiences

• These 70 years are the cultural reference frame and it is very different in China from Belgium

• Learn to see the red treads, the critical x's that drive behavior

• The illogical becomes “logical”. Knowing this is a tremendous asset, use it to your advantage

• The Chinese people are open for and used to change and have big energy. The society and people want to move forward. How to unleash this energy in your company?

• Salary gap, two-class society, availability of cheap labor and effect on society

• Lack of DIY culture, at work, at home, in life

• Standardized work is OK, but improvisation and out of the box thinking is difficult

• Location & talent market (good & bad)

• How to recruit and develop people

• It’s not all about the money: company culture, work life balance

• To hop or not to hop

• Volvo and Polestar human centric company cultures are global and work everywhere

• Chinese-Chinese versus Chinese-Global companies

• Short time thinking: growing economy, meetings, traffic, building durability. This is normal

• If you want to start in China, get the right China expertise. China is different

• Need for manager experts in China, not just people managers. Different from Belgium

A Q&A session concluded the dinner.