Geely Completes China’s Biggest Foreign Car Purchase
Topics: Geely, Volvo
August 2, 2010 at 8:03 pm
Chinese private car maker Geely Holding Group has taken ownership of Ford Motor’s Volvo unit, completing China’s biggest acquisition of a foreign auto company.
Geely said Monday it paid $1.5 billion for the loss-making Swedish luxury car line, less than the $1.8 billion it announced in March. It says the lower price resulted from changes in pension obligations and working capital.
Volvo’s sale price is less than a quarter of what U.S. automaker Ford paid for it in 1999. Ford recently sold its European brands to raise cash and focus on its core Ford and Lincoln units.
Geely chairman Li Shufu says Volvo will remain true to its core values of safety, quality, environmental care and modern Scandinavian design.
Geely says it will spend up to $900 million to boost Volvo’s presence in U.S. and European markets and to grow its share in China’s auto market — the world’s biggest.
But industry experts say adapting the Swedish brand to China’s corporate culture and consumer tastes will be a challenge.
Geely says Volvo will retain headquarters and plants in Sweden and Belgium. It says Volvo’s management also will have autonomy under a board headed by Geely chairman Li.
Some information in this story was provided by AP and AFP.
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