Monday 29th March 2010

Ford Sells Volvo to Geely

Blue Oval offloads Swedish car maker to the Chinese - for a big loss

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Ford has sold Volvo to Chinese car maker Geely for $1.89 billion (£1.2bn), taking a £3.14bn hit on the car maker it bought back in 1999 for £4.34bn.

The agreement means Ford can finally rid itself of Volvo, which hasn't turned a profit since 2005, but the deal to sell the Swedish car maker and its assets to Zhejiang Geely Holding Group will be tied up in (mostly Chinese governmental) red tape until autumn this year.

All but $200m of the deal will be paid for in cash and, after completion, Ford will have no remaining investment in Volvo. It will continue to supply powertrains, vehicle components and stampings for Volvo for an unspecified period of time, however.

"We are pleased to have reached this agreement with Ford, enabling us to safeguard and strengthen Volvo's renowned brand heritage," said Geely Chairman Li Shufu in a statement. "This transaction will ensure Volvo's continued leadership in the premium segment, where it enjoys a global reputation for safety and environmental-friendly technologies.

"This famous Swedish premium brand will remain true to its core values of safety, quality, environmental care and modern Scandinavian design. As part of the proposed transaction, Zhejiang Geely Holdings will maintain the strong collaborative relationships that Volvo has built with employees, unions, suppliers, dealers and above all, customers."

"Volvo is a great brand with an excellent product line-up. This agreement provides a solid foundation for Volvo to continue to build its business under Geely's ownership," said Ford boss Alan Mulally. "At the same time, the sale of Volvo will allow us to further sharpen our focus on building the Ford brand around the world."

[E21_Ross]

blimey, for some reason, i didn't see this one coming! could this be a bad thing for volvo?

[The Lukas]

I seriously don't like this. It just doesn't seem right.

[fluffyducky]

Yup, that came out of the blue!

[Frimley111R]

The Lukas said:

I seriously don't like this. It just doesn't seem right.

You mean a semi premiun brand in the hands of a developing nation who only produce cardboard copies of old western models? It all depends what they do with it but you can be sure they'll get a huge step up in technology from this.

[soad]

The Lukas said:

I seriously don't like this. It just doesn't seem right.

Me neither. Chinese are not exactly known for quality craftmanship.

[Nathe]

The sale of Volvo had been on the cards for a while, it's just a shame they've been sold to a less than reputable manufacturer such as Geely. A few of their models:-




I wonder if we'll ever see any shameless rip offs with a Volvo badge

EFA

Edited by Nathe on Monday 29th March 14:53

[Fittster]

I hadn't realised just how bad volvo was at making money.

[loveice]

Nathe said:

The sale of Volvo had been on the cards for a while, it's just a shame they've been sold to a less than reputable manufacturer such as Geely. A few of their models:-






I wonder if we'll ever see any shameless rip offs with a Volvo badge

Half of what you posted aren't Geely's. The one looks like Matiz is from Chery called QQ, has nothing to do with Geely. And the 7-Series look like is just a badly done photoshop image.

What's the different between Geely owning Volvo and TATA owning Jaguar? At the end of the day, Ford is just trying to survive in the current economic situation. And somehow Geely is the top bidder. All I can see is that free market and capitalist at their best (guess who invented and promoted them). What to complain about?

[cdrx]

fluffyducky said:

Yup, that came out of the blue!

Hah. I see what you did there.

[cathalm]

loveice said:

Nathe said:

The sale of Volvo had been on the cards for a while, it's just a shame they've been sold to a less than reputable manufacturer such as Geely. A few of their models:-






I wonder if we'll ever see any shameless rip offs with a Volvo badge

And the 7-Series look like is just a badly done photoshop image.

As well as being a photoshop apparently, the picture of the 7 series look alike doesn't actually exist.

[The Lukas]

I seriously don't like this. It just doesn't seem right.

[jpf]

So Ford gave away their technology at a loss to the Chinese.

Big mistake, Ford. China will take the technology that Ford sold for a song and use it against Ford--and all of the other major manufacturers.

This a classic example of living in the moment. Ford won the battle, but will lose the war with decsions like this.

Of course, I am also amazed that no one in Sweden wanted to own Volvo...

[timewatch]

soad said:

The Lukas said:

I seriously don't like this. It just doesn't seem right.

Me neither. Chinese are not exactly known for quality craftmanship.

They did build the "Great Wall" and it's stood for thousands of years !

Sorry couldn't resist that..

TW>>>

[Witchfinder]

soad said:

The Lukas said:

I seriously don't like this. It just doesn't seem right.

Me neither. Chinese are not exactly known for quality craftmanship.

There's no reason this can't work the other way 'round (ie: it improves the quality of Geely's lineup, rather than damaging the quality of Volvo). I can't imagine they'd buy Volvo for £1.2 Bn and then throw their investment away by ruining the company.

[TVRWannabee]

The Lukas said:

I seriously don't like this. It just doesn't seem right.

I'm with you on that one but for strategic reasons. I hope this will be a good deal for Volvo but I am concerned so much manufacturing is now controlled by China.

Has the West given up?

[y2blade]

there goes the Volvo QC department then

[renrut]

TVRWannabee said:

The Lukas said:

I seriously don't like this. It just doesn't seem right.

I'm with you on that one but for strategic reasons. I hope this will be a good deal for Volvo but I am concerned so much manufacturing is now controlled by China.

Has the West given up?

Nope its jut broke and playing the capitalist game against people who aren't playing by those rules isn't a particularly clever move IMO. But that would be xenophobic nonsense. I hope.

[akercarm]

UGGGGG...I can't tell you all how disappointed I am in this deal. I was hoping to be a Volvo owner for life. Now, I may be rethinking that hope. At 15, I learned to drive in a Volvo, own one to this day and am now teaching my 15 year old to drive in a Volvo.
The Chinese are well known for being blatant knock-off "artists" with no conscience. How will this deal be any different?
My hope is that Geely will not dumb-down Volvo and compromise the safety and quality we all love. And I hope they will take care of their European workforce.
As an American, I am COMPLETELY disappointed in Ford. Wow...what a sad day indeed.
Tears shed across the pond...

[akercarm]

A refrigerator manufacturer...now I am REALLY sad.

[akercarm]

Okay...tears have turned to laughter!
Just perused the Geely website and looked at their "showroom." Hilarious indeed.
Under "Safety," they list height-adjustable seatbelts and heat insulation glass. OMG--what a joke!
And get this...they have a car designed after a PANDA. "Design elements--the Chinese mascot-Panda (incorporated with many elements of panda, such as chubby, lovely and cartoon appearance."
Dare I call it PANDAmonium?