Geely to buy Volvo

[dragin]

Reuters reports that Geely's Li Shufu said that Volvos will not be built in China (by Geely). Chang'an's current contract to continue to build the Volvo S40 and S80 in Chonqing will eventually expire.

[COPE2]

do you guys think they will move most of the volvo manufacturing plants to china? there is really no point to keep the operations in sweden, other than to benefit swedes. i think they should move all manufacturing to china and bring a few head managers from the old volvo to china. have them work there for a few years. train the locals, and then get rid of the swedes.

[dragin]

Originally Posted by jmsteiny

What a HUGE boost for Geely.

Access to better auto technology, future access to the american market through the existing Volvo dealer network, a positive reaction from the international auto and financial markets......

a win/win deal from what I see.

I can see Geely leaving Volvo alone for right now and using it's newly acquired Volvo technology to upgrade and improve it's Geely/Emgrand/Gleagle products........
THEN in about 3-4 years setting up a new entry level brand in America/Europe through the Volvo dealerships (perhaps the Emgrand products).

Think about it people.....Geely didn't just buy a car company - they bought a EXISTING DEALER NETWORK (complete with infrastructure in place) in America and Europe (and Japan too, I assume).

Geely just bought themselves a ticket to the "big 3 auto market" party - the spotlight will be on them now to see WHEN and HOW they will show up to the party.

JM this is what USA Today should have included but for the breadth of view you have.
Hope you don't mind my putting some emphasis on your valuable insight...

[Mike619]

will Geely's car quality skyrocket after this acquisition? Do they actually replace some volvo superior technology on to Geely's?

[arman1]

NO chance.

[Learner_Driver]

Hmm I would like to see a car built by the joint partnership. Maybe Geely has what it takes to breath some life back into Volvo.

[green car driver]

Originally Posted by COPE2

do you guys think they will move most of the volvo manufacturing plants to china? there is really no point to keep the operations in sweden, other than to benefit swedes. i think they should move all manufacturing to china and bring a few head managers from the old volvo to china. have them work there for a few years. train the locals, and then get rid of the swedes.

Not so fast, that would kill the brand! Many people buy Volvo cars in Europe, because they have a swedish feel, and because they're built in Sweden by great workers. A chinese Volvo might sell in China, but nobody would buy it in northern Europe.

[chinzilla]

i think geely acquisition of volvo is their campaign to expand their european market. Because when they sell volvo in europe, they are making the exchange difference of euro and yuan. The money that earn allow them to finance other projects in China. Also volvo technology will help geely a great deal. Beside, Geely has the capabilities to produce volvo cheaper than any european company can make it in europe.

[KiwiGuy]

EU gives go ahead for Volvo aquisition

From Associated Press:

European Union regulators on Tuesday approved Chinese carmaker Geely to buy Sweden’s iconic Volvo Cars.

The European Commission said it sees no antitrust problems with Zhejiang Geely Holding Co.’s $1.8 billion acquisition of Volvo Cars from Ford Motor Co. because the takeover won’t give either company the power to damage rivals.

Geely sells hardly any cars in Europe and Volvo only has “very limited” operations as a car parts supplier, it said.

Geely’s acquisition of Volvo from Ford Motor Co. has been heralded as a breakthrough deal for China’s auto industry, giving one of its most ambitious automakers a well-known, prestigious global brand and access to top-tier technology.

The deal could give Geely a critical edge in China, which is the world’s biggest auto market and one in which foreign brands often dominate. It will also gain its first major foothold in Europe.

Geely, meaning “lucky” in Chinese is a privately-run company that has gradually built its business selling cars, motorcycles and scooters with little government support.

It teamed up with the Chinese state-owned investment firm Daqing to buy Volvo. It says it will spend an extra $900 million to expand production and make Volvo profitable again.

The EU’s executive said its Tuesday approval would not affect any decision it could make on European state subsidies for Volvo.

The car maker received state guarantees from Sweden last year to help it secure euro500 million from an EU government-backed bank. The money was earmarked to develop fuel-efficient cars.

Ford has been trying to sell Volvo since late 2008 to focus on its core Ford, Lincoln and Mercury brands.

[CCF mod]

Chinese govt approves Geely's purchase of Volvo

Zhejiang Geely Holding Group Co is expected to complete it takeover of Swedish luxury car brand Volvo from US automaker Ford Motor Co on Monday after getting government approval for the deal.

Ministry of Commerce officials told China Daily on Thursday that the government cleared the Volvo deal on Monday 26, after the National Development and Reform Commission cleared the proposal last week.

Geely has also got the necessary anti-trust approvals from the European Union and the US government for the deal.

"With this the decks are now clear for Geely to complete its acquisition of Volvo and start manufacturing the brand in China," said Wang Zhile, director of the research center on transnational corporations under the Ministry of Commerce.

Yuan Xiaolin, Geely's spokesman for the Volvo deal was unavailable on Thursday for comment. However, unnamed sources from Geely told China Daily that the Zhejiang-based automaker will hold a formal function on Monday to complete the deal.

Geely's shares surged nearly 11.32 percent and closed at HK$2.95 per share in Hong Kong on Thursday.

Privately owned Geely paid $1.8 billion to acquire the Volvo car brand from Ford on March 28 this year. It was the biggest overseas deal made by Chinese automakers in recent times.

Geely Chairman Li Shufu had at that time indicated that the company would invest $900 million as operating capital in Volvo apart from the $1.8 billion purchase price.

Geely said on July 15 that it had appointed Li as the chairman of the board at Volvo Car Corp. At the same time it appointed the former president and CEO of Volvo Hans-Olov Olsson as the vice-chairman.

More appointments to the board and top management, including the chief executive and chief financial officer, may be made next week, said sources.

Analysts said the Volvo buy will help Geely gain a competitive edge in China and also a major toehold in Europe.

Pursuant to completion of the deal, Geely is likely to start making Volvo cars locally.

Though it has not announced a location yet, indications are that it may consider Jiading in Shanghai, Chengdu in Sichuan, Beijing or Tianjin as possible production sites.

During the firsts six months of the year, Volvo sold 15,497 cars in China, up 88 percent over last year.

That compares to the Swedish luxury brand's 5.2 percent and 9 percent year-on-year decline in major markets like the United States and Germany.

Geely plans to increase Volvo's annual sales in China to 150,000 units by 2015, said sources.

http://www.chinadaily.com.cn/china/2...t_11070251.htm