For better or for worse, Ford Motor Company has finalized a deal to sell Volvo Cars and related assists (primarily intellectual property) to Chinese automaker Zhejiang Geely Holding Group Company Limited for US$1.8 billion (€1.35 billion at today's exchange rates).
The Detroit company said that the transaction will be made in the form of a note in the amount of US$200 million and the remainder in cash.
It's worth noting that Geely has acquired Volvo at a fraction of what Ford paid for the Swedish automaker at $6.5 billion in 1999.
Ford said that even though Geely owns 100 percent of Volvo, due to the fact that the Swedish automaker's cars share core components and technologies with its own vehicles, it will continue to supply the company with powertrains, stampings and other vehicle components for an undefined period.
As part of the sale, Ford also has committed to provide engineering support, information technology, access to tooling for common components, and other selected services for a transition period to ensure a smooth separation process.
"Volvo is a great brand with an excellent product lineup. This agreement provides a solid foundation for Volvo to continue to build its business under Geely's ownership," said Alan Mulally, Ford's president and CEO. "At the same time, the sale of Volvo will allow us to further sharpen our focus on building 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."
Li Shufu, chairman of Zhejiang Geely Holding Group Company Limited said: "Zhejiang Geely would like to pay tribute to Ford's stewardship of the Volvo brand, and we look forward to continued cooperation as Volvo embarks on the next stage of its evolution with Geely."
Stephen Odell, CEO of Volvo Cars, added, "The Volvo management team fully endorses Ford's sale of Volvo Cars to Geely. We believe this is the right outcome for the business, and will provide Volvo Cars with the necessary resources, including the capital investment, to strengthen the business and to continue to move it forward in the future."
With the sale of Volvo, Ford has completed the dismantling of its (European) premium group, which at one point also included Aston Martin, Jaguar and Land Rover.
25 Comments:
It would be better if Volvo is phased out, than belong to Chinese company.
Sad!
Booooooo!
Bye bye Volvo, a chinese Volvo is no option.
phase volvo out? no. the upcoming s60 has great promise and our 2010 awd xc60 turbo is the best vehicle we have owned thus far. i enjoy it more than my '08 bentley gt. ford's loss.
it is ford's lost since ford builds their cars on volvo platforms and uses volvo awd as well and in other countries volvo's powerplants. there would be no ford focus rs without the turbo inline 5 from the c30. ford uses the last generation of volvo parts for current cars on the road.
Bad news for a Volvo owner...
A sad day for Volvo...as compared to the positive outcome of Saab... I guess Volvo owners may make a switch to Saab? Who knows...
Geely may take advantage of Volvo's IP's... and manufacture better cars...Volvo?...not sure whether it can continue for life...
VOLVO is DEAD !
What is wrong with you guys. Just because Geely is a Chinese company doesn't mean it's going to be bad for the product. Volvos will still be made in Volvo Factories, and they will only continue to improve. Ford always treated Volvo like the red-head step child anyway... Raping it of all of it's safety technology, and giving nothing in return.... Volvo is better off now.... Why is Saab better off... Just because they were bought by Europeans?? Everything else in your house is made in China... You have no problems with that, so you?
Do not worry you nuts they will employ the same quality standards throughout various stages of manufacturing.. otherwise they won't sell. The Chinese businessmen are at the least nuts like you guys.
Strange how all of a sudden Volvo and Saab saved the companies that bought them with their Swedish engineering prowess.
If you notice, the agreement is to continue to provide Ford parts for Volvo not Volvo parts for Ford.
So much racism... I mean from Volvo in previous years when they were disparaging certain peoples for being sweaty Southern Europeans. Not like the Swedish people.
I am talking about when Fiat was a possible purchaser of Volvo some years ago. I am not talking about the business aspect of the negotiation, which to me seems like it would not have worked which is why it fell through. I am talking about the commentary that came out of Volvo.
This is a generalization based on comments by Volvo officials and the term racism is of course not accurate, but I wonder how they are taking this negotiation.
They are acting like they like it...
VOLVO = R.I.P. !!!
Most comments anti-Chinese/Geely in here are based purely on blatant racism, prejudices and stereotypes created by yourselves.... Volvo survives and unlike SAAB the the Volvo acquisition was financially sound from the onset...just because Geely are Chinese and non-American/European that makes them less humanly capable?
"blatant racism,"
You're a moron.
The phrase 'Chinese' indicates a nationality, not a race, you overly PC tit! A person from China may be of one of many different races as China does occupy a vast swath of Asia.
Race only becomes a problem when someone brings it up.
Volvo's are great vehicles and all of us proud owners will continue buying them. These cars will have different owners, but at that price tag, will remain true to what Volvo is all about and always has been. Kudos!
i agree with the ethnic profiling, but realize that some people are just ignorant and would not have purchased a volvo any way. it was a business deal and the fine people are very deserving.
Great, I liked Volvo, to bad.
what is wrong with everybody?!?!?!?! this is great news, volvo being in a chinese market means profits!!! and geely will give volvo the finances for volvo to develop even more. On top of that, with geely using volvo components, geely sales will improve, giving volvo even more slack. this is probably one of the greatest things that has happened to volvo since the early 2000's
It is subjective...not everyone can see the goodness of the deal from a business perspective...
We can only hope that Volvo will move on to better heights with Geely...However, on second thought...what is the current fate of MG (since they have released the MG6 hatchback)?
Geely like Spyker is a small companiy. Volvo will be taken care of much better. Unlike a multinational like ford. It will be given much better treatment. Don't be surprised if Volvo rises as brand.
Great! Now I won't be able to drive a new Volvo for fear of lead poisoning! RIP Volvo.
geely wouldnt mess with volvo because they need volvo to improve upon themselves. what would be the point of this acquisition????? someone please answer me
Volvo safety + Made in china = Fail.
Search "Chinese crash test" on YouTube.
LOOK AT MG ROVER !
Sad day for Volvo.
RIP !
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