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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.
 

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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.
 

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jmsteiny said:
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...
 

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

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COPE2 said:
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.
 

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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.
 

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Discussion Starter #29
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.
 

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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/2010-07/30/content_11070251.htm
 

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Ford officially sells Volvo to Geely for $1.8b

After months of protracted negotiations, Ford has officially sold Volvo to Zhejiang Geely Holding Group Company Limited – aka Geely – for $1.8 billion.

The Chinese automaker originally included a $200 million note and the balance in cash, and today, it paid the remaining $1.3 billion to wrap up the sale, although the final sale price won't be released until later this year and could put more cash in the pockets of FoMoCo.

Under the terms of the sale, Ford will continue to supply Volvo with everything from powertrains to stamping systems and other vehicle components for differing periods of time. Additionally, Ford and Geely have come to an agreement on intellectual property usage, with Volvo allowed to grant sub-licenses to specific systems to third parties, including Geely.

Stefan Jacoby – formerly of Volkswagen – will take the helm as the new President and Chief Executive of Volvo Cars, and under the new ownership, the automaker will continue to keep it headquarters and manufacturing centers in Sweden and Belgium.


PRESS RELEASE
FORD MOTOR COMPANY COMPLETES SALE OF VOLVO TO GEELY

DEARBORN, Mich., Aug. 2, 2010 – Ford Motor Company [NYSE: F] today announced it has completed the sale of Volvo Car Corporation and related assets to the Zhejiang Geely Holding Group Company Limited.


The total purchase price for Volvo and related assets set forth in the agreement signed in March 2010 was $1.8 billion, including a $200 million note and the balance in cash, with the cash portion subject to customary purchase price adjustments at closing. Pursuant to the terms of the agreement, Geely today issued the note and paid $1.3 billion in cash to complete the sale. The estimated purchase price adjustments used at closing are expected to be finalized and settled following final true-up of the purchase price adjustments later this year. The final true-up is expected to result in additional proceeds to Ford.

"Volvo is an excellent brand with a strong product line, and it has returned to profits after a successful restructuring. We are confident Volvo has a solid future under Geely's ownership," said Alan Mulally, Ford's president and CEO. "At the same time, the sale of Volvo will allow us to sharpen our focus on the Ford brand around the world and continue to deliver on our One Ford plan serving our customers with the very best cars and trucks in the world."

Ford will continue to cooperate with Volvo in several areas to ensure a smooth transition, but has not retained any ownership in the Volvo business. Ford will continue to supply Volvo with, for differing periods, powertrains, stampings and other vehicle components. Ford also has committed to provide engineering support, information technology, access to tooling for common components, and other selected services for a transition period.

Agreements between Ford and Geely govern the use of intellectual property; these agreements will allow both Volvo and Ford to deliver their business plans and establish the proper use of each other's intellectual property.

"The Volvo team has made tremendous progress in restructuring its business and delivering results during the sale process," said Lewis Booth, Ford executive vice president and chief financial offer. "We believe this agreement will provide Volvo with the necessary resources, including the capital investment, to strengthen the business and to continue to move it forward in the future. We wish Volvo's management team, employees and new owners every success for the future.

"Ford appreciates the support of the Volvo management team, Volvo's labor unions and the government officials in Sweden and China during this transaction," Booth added.

As previously announced, Stephen Odell, CEO of Volvo Car Corporation, is returning to Ford as group vice president and Chairman and CEO of Ford Europe. Stuart Rowley, CFO of Volvo Cars, is returning to Ford as chief financial officer, Ford Europe.

"Volvo is a proud company with a talented and dedicated team of employees," Odell said. "I am especially pleased that with Ford's continued investment in recent years, Volvo is well positioned for the future with an exciting range of products that remain true to its core values – safety, quality, environmental responsibility and modern Scandinavian design."


Geely Holding Group Completes Acquisition of Volvo Car Corporation

Stefan Jacoby Named President and Chief Executive of Volvo Cars; New Board Unveiled

HANGZHOU, China and GOTHENBURG, Sweden, Aug. 2 -- Zhejiang Geely Holding Group Co., Ltd. ("Geely Holding Group"), one of the fastest-growing car manufacturers in China, today announced it has completed the acquisition of 100 per cent of Volvo Car Corporation ("Volvo Cars") from Ford Motor Company.
Geely also announced that Stefan Jacoby, the Chief Executive of Volkswagen Group of America, would become President and Chief Executive Officer of Volvo Cars.

Li Shufu said: "This is a historic day for Geely, which is extremely proud to have acquired Volvo Cars. This famous Swedish premium brand will remain true to its core values of safety, quality, environmental care and modern Scandinavian design as it strengthens the existing European and North American markets and expands its presence in China and other emerging markets."

Stefan Jacoby, the new President and Chief Executive of Volvo Cars, said: "I am honoured to join a company with the prestige and growth potential of Volvo. Our employees, suppliers, dealers -- and above all our customers -- can be confident that Volvo will preserve its special status as the industry leader in vehicle safety and innovation -- even as it pursues new market opportunities."

Following completion of the transaction, Mr. Stefan Jacoby will join the board of Volvo Cars, chaired by Li Shufu, Chairman of Geely Holding Group. The board will comprise several new directors including Hans-Olov Olsson, a former President and Chief Executive of Volvo Cars and a former Chief Marketing Officer of Ford, who will become Vice-Chairman of the board.

As announced on the signing of the stock purchase agreement on 28th March, 2010 Geely has agreed to pay USD 1.8 billion for Volvo Cars, which included a USD 200 million note with the balance paid in cash.

Geely issued the note and paid USD 1.3 billion in cash for Volvo Cars, utilising financing from Chinese institutions and its own balance sheet as well as international capital market resources. The closing consideration reflects adjustments in areas such as pension obligations and working capital.

Under the new ownership, Volvo Cars will retain its headquarters and manufacturing presence in Sweden and Belgium; and its management will have the autonomy to execute on its business plan under the strategic direction of the board.

As part of the transaction, Volvo and Ford will maintain close component and supply relationships, ensuring continuity in areas where they provide supply to each other.

Completion of the acquisition, which follows more than a year of talks between Geely and Ford, was marked at a signing ceremony in London attended by Li Shufu and Lewis Booth, Chief Financial Officer at Ford.

Mr. Li thanked Ford and the Volvo Cars management for their support during the transaction negotiations, and also paid tribute to union and government officials with whom Geely built close contacts.

"The signing and completion of this acquisition reflects the commitment of Ford and Volvo executives to the future of this company, along with the vital input of labour representatives and government officials in Sweden, Belgium and China as well as other relevant countries," said Mr. Li.

The Geely Chairman added that Mr. Stefan Jacoby will succeed Stephen Odell as Volvo Cars' President and Chief Executive, taking up his role on 16th August, 2010.

Hans-Oskarsson, deputy Chief Financial Officer, will become acting CFO of Volvo Cars, replacing Stuart Rowley. Mr. Odell and Mr Rowley are moving to leadership roles at Ford of Europe.

Along with the new management team at Volvo Cars, Geely today named the full board of directors for the Swedish carmaker, comprising:

Li Shufu (Chairman)
Hans-Olov Olsson (Vice-Chairman)
Freeman H. Shen
Hakan Samuelsson
Dr. Herbert Demel
Lone Fonss Schroder
Winnie Kin Wah Fok

The board -- which will include three labour representatives nominated by unions at Volvo Cars -- will assume its duties on completion of the transaction.
http://www.autoblog.com/2010/08/02/ford-officially-sells-volvo-to-geely-for-1-8b/
 

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green car driver said:
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.
please save the propaganda. i doubt swedish workers are greater than chinese ones. just because people have been brain washed into thinking europe made cars are better does not actually mean they are. the point of a business is to maximise profits, not by giving hand outs to great swedish workers. also, i am sure if geely moves volvo operations to china, it will also get govt subsidies, furthering their economic advantages. theres a reason why volvo sold their firm in the first place. maybe because the current system isnt working, and the great swedish workers were not doing their job right. if geely continues the same great swedish path that volvo had then geely will end up having to sell volvo again. this time for $500 million.
 

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Volvo's new factory to settle in Chengdu, Shanghai, Daqing

November 12, 2010
Geely chairman Li Shufu said on Nov. 10 that Volvo's new board has now decided to make China its "second home market” outside of Sweden and plans to build three plants in Chengdu, Shanghai and Daqing.

Li Shufu, chairman of Zhejiang Geely Holding Group, met Swedish King Carl XVI Gustaf along with Swedish scientists and businessmen in Zhejiang's capital Hangzhou, where Geely is based, and answered questions concerning Volvo's future and whether it will cause job losses in Sweden.

Li said in the past three months, the new Board of Directors held two meetings, and the Board and management decided to build China into Volvo's second home market. It announced the management team in China and plans to set up three plants in Chengdu, Shanghai and Daqing. Li said Volvo's layout in China "is well underway."

Li said that Volvo's strategy in the future is local development, local production and local sales.

"Europe's Volvos are to be produced in Europe. Volvos in the Chinese market are to be produced in China," he said.

The delegation of King Carl XVI Gustaf and the Royal Swedish Academy of Engineering Sciences was invited by the Chinese Academy of Engineering to visit China.

Chinese carmaker Geely Holdings Group Co. Ltd. and Ford Motor Co. signed the acquisition deal on March 28 and Geely took over Volvo this August after paying 1.5 billion U.S. dollars.

Geely's 100 percent ownership of Volvo provided the Chinese automaker with Volvo's nine vehicle models, three of its latest production platforms as well as production capacity of 600,000 units and more than 2,000 sales locations worldwide.

As soon as the agreement was completed, the Chinese group named Li Shufu, chairman of the board for Zhejiang Geely Holding Group, as the chairman of Volvo. Volvo's brand value is estimated at 2 billion U.S. dollars.

http://autonews.gasgoo.com/china-news/volvo-s-new-factory-to-settle-in-chengdu-shanghai-101112.shtml
 
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