Volvo-Geely Deal
April 3, 2010 by Paul Balck · Leave a Comment
Volvo-Geely Deal – Li Shufu, the chairman of Zhejiang Geely Holding Group, has agreed to buy the failing Volvo brand from Ford. The record deal has been set at $1.8bn, representing a new era for the Volvo brand, and is the biggest overseas deal for a Chinese manufacturer.
This isn’t the first and won’t be the last of Ford’s brand to be sold. Jaguar and Land Rover have already been purchased by India’s car manufacturing giant Tata Motors, so it was only a matter of time until Volvo was purchased, especially seems as though it has been on the market for over 2 years now.
The decision by Ford is slightly contradictory. They originally paid $6.5bn for the Volvo brand, but “need the cash” to pay off debts, even though the sale represents a loss of nearly $4bn. Maybe their investment and acquisition team need a few days training?
Either way, the future looks bright for Volvo, as they are being taken over by an established brand.
Geely was originally founded back in 1986, when it was known for being a refrigerator parts supplier. Since then they have switched their operations schedule to produce over 300,000 vehicles a year thanks to the team work produced by their huge staff database of 12,000.
The volume of vehicles is rising at an extremely rapid rate, with 13,000,000 being sold last year alone. For this reason Geely expects to increase its sale to around 400,000, with the help of the newly acquired Volvo brand – hopefully they do better than Ford!
