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Thread: China's Geely buys Volvo

  1. #1
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    Default China's Geely buys Volvo

    I find it ironic that one of the world's unsafest auto manufacturers has purchased one of the leading brands for automotive safety.

    GOTHENBURG, Sweden (Reuters) - Zhejiang Geely Holding Group, China's largest private-run car maker, agreed on Sunday to buy Ford Motor's Volvo car unit for $1.8 billion, the country's biggest overseas auto purchase.

    The takeover underscores China's arrival as a major force in the global auto industry and ends nearly two years of talks with Geely over Volvo -- the last sale from Ford's former premier group, which also held Aston Martin, Jaguar and Land Rover.

    Geely said in a statement it had secured all the necessary financing to complete the deal and "significant working capital" to fund Volvo's business.

    "Today represents a milestone in the history of Geely," Geely chairman Li Shufu told a news conference, adding that Volvo Cars would remain a separate company with its own management team based in Sweden.

    The deal, which both sides aim to close in the third quarter, will free up cash for the number two U.S. automaker and enable it to focus on its core Ford brand.

    Geely, parent of Geely Automobile Holdings, was named by Ford as the preferred bidder for its loss-making Swedish unit in October 2009.

    The Chinese carmaker, which clinched Volvo at a price tag well below the $6.5 billion Ford paid for it in 1999, plans to keep the brand and operations in Sweden.

    Geely chairman Li Shufu is already planning a factory in Beijing which will make 300,000 Volvo branded cars, or as many Volvos for China as are now made abroad for foreigners.

    Made-in-China Volvo may also get a boost from Beijing's plan to support domestic brands and replace Volkswagen AG's Audi A6 as Chinese state officials' car of choice.

    China raced past the United States to become the world's top auto market last year, with sales surging 46 percent to a record 13.6 million units. It is keen to move into Western markets but has so far lacked the technology and brand recognition to do so.

    The Volvo deal should help the Chinese carmaker to get around some of those obstacles more quickly.
    Source: http://ca.news.yahoo.com/s/reuters/1...us_volvo_geely

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    Made-in-China Volvo may also get a boost from Beijing's plan to support domestic brands and replace Volkswagen AG's Audi A6 as Chinese state officials' car of choice.
    Volvo now a Chinese domestic brand. Who would have seen this coming a decade ago.

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    It will be really intresting to see how this develops, lets see if the Chinese can pull Volvo out of the hole.

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    $6.5 billion Ford paid for it in 1999.....Volvo to buy Ford Motor's Volvo car unit for $1.8 billion
    ouch. Seems like a bargain for a fairly well known car company.

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    Seems like a bargain, shame it had to go to a non European company. Volvo has been dead to me since the 70's and maybe 80's. Cannot get much more in the hole than with Ford, looking seven feet under at this point.

    China will pass a law requiring all Google China users to buy a Volvo.

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    Does that mean Volvo's don't have resale value anymore?

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    Originally posted by black13


    ouch. Seems like a bargain for a fairly well known car company.
    I believe the buyer inherits Volvo's debts.

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