Ford, Geely Agree on Volvo sale terms

Chinese automaker will purchase the Swedish brand for $1.8 billion

Ford has finally done it - it has secured a deal to sell off its Volvo Cars division.

The Detroit-based automaker has drafted a deal with Chinese Zhejiang Geely Holding Group to buy the Swedish brand in the second quarter of 2010. Ford has said that all the key terms of the deal have been agreed upon. But Geely still has to secure financing for the purchase and obtain approval from Chinese regulators.

Ford released a statement on the sale saying it would ensure Volvo's future and that Ford will be focusing on its ONE Ford strategy of strengthening the brand's global presence.

With the sale Ford will not retain any ownership of Volvo but will continue to cooperate with the brand on certain projects, the company said.

For Geely Automotive, a subsidiary of the holding group, the purchase provides it with advanced automotive technology and a valuable inroad into Western markets for a Chinese automaker.

Geely will be acquiring Volvo for an estimated $1.8 billion (1.26 billion euros). Ford bought Volvo for $6.45 billion (4.5 billion euros) back in 1999.

Source: autonews.com (sub req)

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hubix_mt

Let's hope that they mantain a Tata-Land Rover / Jaguar relationship, where there is good investment for the benefit of each brands, not combine or use new technologies for Geely veichles.

December 23, 2009 9:09 pm

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audilover

You can hope all you want, but history is against you (e.g. Roewe). Investing in other countries for the benefit of a foreign subsidiary is really not the Chinese business model.

December 24, 2009 5:41 am

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rogers

Well, the Americans kinda destroyed Swedish carmakers...

December 24, 2009 8:19 am

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mldrieling

rogers, the swedish carmakers destroyed themselves. The weren't in a strong enough financial position (ever) to avoid being taken over by the Americans. Ford did better with Volvo than GM and Saab but neither Swede was ever a world player (before or after the Americans). At least this will keep the Volvo name around.

December 24, 2009 11:48 am

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sub39h

i don't think that's true at all. whilst Ford did make some smart decisions with Volvo, they both could have made a better go of it. one thing i would have done if i were Ford was taken Vovlo's D5 diesel with me. that's an engine they're definitely going to need over the coming years.

December 24, 2009 8:48 pm

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theone77

honestly it is sad to see volvo and saab go, but agree they didn't establish themselves for the global market and getting 6 billion was more than enough for the swedes.

December 24, 2009 1:45 pm

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Edison

If Geely prove to be smart, they will keep Volvo as a viable enterprise and use Volvo engines and technologies in their cars, instead of taking what Volvo currently has and then shutting them down. Ford are going to regret this decision as they are building up a competitor. Geely can now use Volvo powertrains, safety design, etc, in all of its cars and sell at much less than a Ford. People will buy these cars regardless of where they are made. And actually, they will probably sell better than Ford in China, since the Chinese probably want to buy a car from an indigenous brand.

December 24, 2009 4:07 pm

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maloparac

And thats how Chinese entered the Europe.....Next on history class is Why are we all Chinese

December 24, 2009 4:35 pm

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error32

Chinese companies did bought some European Electronic companies years earlier, but nothing happened, these brands just fadeout. Volvo will be the same.

December 26, 2009 7:00 am

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sensei

The Chinese don't know how to make cars but they have a lot of money. The end result of all these sales to China will be that they will learn to build high quality and safe cars at ridiculously low prices that they will dump into America due to our stupid religion of "free trade". China thinks long term while most Americans can only think quarter to quarter.

December 26, 2009 10:35 pm

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crazy_golf_driver

Well i dont think the china boys will screw this up... look at what happened to land rover and jag, TATA just pumped cash into them, and now the doing better than before.So when volvo get sold, the chinese will re invest into their product....just so they can keep the technology updated, and both brands running.

December 28, 2009 6:16 am

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