It’s official – Zhejiang Geely Holding Group Company Limited (or Geely as its known to you and me) has completed its acquisition of the Volvo Car Corporation from Ford Motor Company. This has been done to a tune of a US$1.8 billion amount which was originally agreed upon in March 2010.
This purchase price was made out of a US$200 million note with a cash balance subject to customary purchase price adjustments at the close of the sale. Geely have now paid off the note and US$1.3 billion in cash to complete the sale. Final balance figures are expected to be finalized later this year.
On the matter of technology and manufacturing, Ford will continue to supply Volvo with powertrains, stampings and other vehicle components at differing periods. This also includes engineering support, information technology, access to tooling for common components, and other selected services for a transition period. In terms of intellectual property, agreements are currently being made to govern the use of Volvo’s intellectual property by Ford.
Former Volkswagen Chief Executive of America Stefan Jacoby, has been appointed the new President and Chief Executive of Volvo Cars. They will also retain their headquarters and manufacturing presence in Sweden and Belgium while the management will be allowed independence to execute its own business plans with direction from its new board.
An exciting step for both companies, that will no doubt see the rise of Geely as a global market player and the influx of Chinese investment into one of the top Swedish auto brands.
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I can hear the Volvo fans sigh in despair, but set aside all prejudice, hope this make Volvo produce more beautiful cars…China or not, they are the manufacturing giant and have all technical ability to mass produce.
Volvo will remain a Volvo, as Jaguar is still a Jaguar even though the British company being bought by the very country they colonized ages ago.
Hey, even Lotus is owned by Proton and nobody’s complaining, hehehe….
I think sweden will protect their own product, which probably means 50% or more of the board of directors must be of sweden nationality.
Same goes for Jaguar, Lotus, Bentley and more. Investors like Tata, Geely, Proton and many more are nothing more than financial investors.
I believe to transfer a technology from one foreign company to another foreign company requires approval from their respective government. Which is why Lotus was not able to transfer all the technology to proton when proton owns 100% of lotus.
The Chinese must innovate at their own pace, put more money into R&D and tighten their laws to protect intellectual properties. Buying up companies has never been a good solution, it gets you nowhere.
Automotive technologies can be very high tech, but no – governments around the world do not control the transfer of auto technologies. What they are controlling is military technologies, high end computing, bio-tech and possibly some agricultural know-how (disease resistance crops etc). These are defense and food-supply technologies critical to survival of a nation during a war.
you have a point there mate. However in the case of Proton & Lotus, I believe we are left short handed, reason being Lotus is a niche car company/engineering solutions company to begin with. They dont even know about mass production and their SOP (in developing and designing cars) are of cottage industry scale, which doesnt help proton much. But, credit to Lotus, their know how in handling and weight reduction is second to none but for Proton the cost might be escalating and doesnt bode well with Proton business model. Mitsubishi is a good company (as other Japanese is way to expensive) and Proton should consider buying them perhaps :P
“Lotus and Proton.. No one’s complaining?”
I am.
It was all right for the past few years, where Proton mostly left Lotus alone and just took some of their technology. But now, for some reason(reported by Autocar), Proton decided to interfere more. And the first thing they did was to set a totally different direction for Lotus: No more lightweight policy, focus on big(and heavy) supercars.
They’re destroying everything that Lotus stood for and trying to make it another Ferrari
Lotus was doing badly long before proton bought them. Another company, the name escapes me at the moment, bought lotus, that company went under. Proton bought lotus. Still loosing money until today.
Lotus have doing the same thing, with the same result : loose money. They have to change.
Doing the same thing over n over again but expecting different result is a sign of insanity.
The previous Lotus owner was Romano Artioli who also owned Bugatti SpA ( now owned by Volkswagen ) before he sold all remaining shares to Proton Holdings back in 96′.
I owns a Volvo, as the matter of the fact, I am planning to buy another one.
I have full confidence to Volvs new partner.
way to go volvo
Very Good news! Soon we ll see rebadge volvo running around !
geely cars with volvo badge perhaps?? or even better – volvo cars with geely badge!! top premium product with 1/3 of the price. C30 i want one!!
So Ford will keep the knowledge for manufacturing powertrains, stampings and other vehicle components?
Then the price is too high in my opinion…
im a Volvo owner, i believe Volvo will continue stay strong as “the most safety car” and same goes to Range rover and jaguar sold to an indian company previously :)
wo…will Chinese car be safer from now?
Geely is more like an owner and investor. Volvo technology isn’t going to trickle down to the whole of China. Besides, Great Wall and Chery are the Chinese auto companies to look out for. They have been making progress and improvements by strides. They’re just like how Hyundai and Kia were 10 years ago.
“wo…will Chinese car be safer from now? ”
this question has askes for century ago, ” will japanese car be safer from now ”
What do we see today, japanese merchandises are everywhere in the world today and high-tech too.
Wow..its good for Geely. Can improve their car quality.. Volvo safety are world best.
Finally is over…. so what next ??
more coffin shape cars??? or dare to change the DNA…??? hopefully they start to evolve away frm the coffin shape boxy look.
That coffin shaped car have helped many people AVOID a coffin!
Volvo hasn’t been coffin-shaped for ages.. are you a time-traveler from the year 1995?
Volvo are called moving tanks not coffin… Try hit a volvo and you will know why…
An Alphard…. that’s a coffin.
they are not coffin-shaped.
although the design were not smooth enough,
it proven to be the best design for both aerodynamic and safety.
that why many American loves to own a Volvo.
it’s like driving a tank!.
Geely founded in Y2K, bought Volvo.
Potong founded in 1985, bought Lotus.
I thought we will have Lotus engineering down the road, then suddenly, Mitsu Waja Lancer now…
Proton designed the current Mit Lancer and agreed to loan the design to Mitsu to have them from financial collapse. This is part of the agreement to help Mitsu to better position themselves in the global market. After 3 years using the loan design, now Mitsu returned them back to Proton…
If proton design lancer first, why not we use first? Arent we disadvantage of getting a bigger market due to the design already been use by other first but not us? I think is another way round which Proton loan mitsu lancer…
thats what we call potong bought mitsu
I don’t think geely with rebadge volvos.it would ruin the brand that they have paid good money for.rebadging usually happens in MOU tie ups but not when the “premium brand” is OWNED by a “non premium brand”.china is good at copying stuff which does not belong to them but it would not make sense to copy what they already own.
And I hope they are able to cope with the cost of RnD of the Volvo cars. I wonder why did Ford sold the Volvo in the first place. Something not right here…hmm…maybe of the cost is decreasing… Geely should know the consequences… anyway, good luck to them transferring Volvo technology to theirs…
Ford is too messed up internally to really reap the best out of Volvo and Mazda. But relatively speaking, they’re not as bad as some other American carmakers.
Agree. I think Ford is still struggling. To many competitors now. They need a good strategy. In the late years of 80s, Ford was the most famous car around. If somebody asks u ” what car u drive” and the response “Ford”, definitely its “wow”, but now when somebody asks you the same question, the “wow” factor isn’t there anymore.
I m always the big times Volvo fans.. now not sure what is going to happen in Volvo innovation in safety? I hope Geely would give much room for them to focus on Volvo core business which is World class- SAFETY and car innovation like light pressure turbo….etc!
Volvo’s innovation like a light pressure turbo?
The drivetrain is from Ford and the 5cyl turbo engine was purchased from Audi… ;)
Good challenge..but could u quote me who did use light pressure turbo for NORMAL passenger car those day in late 90s…? Those famous turbo charge car brand were basically a dead brand in malaysia those day, dont u agree my dear friend?
volvo.user, where have you been?
s60,c30 is ok…..i wonder what will happen to the next s40,s80, or future XC models in the coming China days…. guess we gotta wait n see. but i have high hopes in volvo. just like how the Jag’s new XJ looks like, hope it will do well.
wat a shame…! but congrats 2 china’s Geely..????~?i’m not racist…MALAYSIA also BOLEH~!
haha, soon even Volvo will be made in….. China!!
well Geely could position itself as a budget brand while Volvo itself is a premium brand(with a family image).
It could just be helpful for Geely to enter europe.
yup i believe the acquisition will not affect Volvo quality.
in fact, the acquisition would allow Geely to gain technology,engineering and perhaps the design knowledge from Volvo.
hopefully we can see Geely cars with Volvo quality available in Msia in the next five years.
one thing for sure, the next twilight movie, edward driving a Geely suv……
now let’s hope that economies of scale would drive volvo’s price down…though i’m a bit worried about future Volvo drivetrains…currently they’re using Ford’s….but in the future when the agreement expired i wonder how they would source it….Volvo is not really a company known for it’s engine technology….
Volvo used Ford’s engine on some of it’s models especially the smaller ones like S40, C30. The bigger engines are Volvo designed (except the Yamaha designed V8).
sigh…
The most important things for Volvo brand regardless of who owns the brand – Volvo Cars need to expand the products/ up the level of sophistication in their cars, the R&D centres shall remain in Sweden and the critical parts/components used shall remain produced by the established suppliers. Lose the last 2 and Volvo will lose the trust of the customers. I think Geely bosses is smart enough not to ‘kacau’ the current set up to safeguard their investment in Volvo.
I think the biggest problem Volvo has nowadays is identity crisis. In the pursuit of gaining more desirability, they somehow lost their identity or character. It’s like they are trying to achieve too many things with their cars, and instead of bringing more customers, they end up with losing more customers.
Although Volvo cars are safe and much more desirable than before, their presence is not something special anymore, especially when you compared with those big time German players. and their cars are not any less safe or desirable than Volvo cars.
So I hope Geely will help in rediscovering the real identity or character of Volvo, enhance them while try to make Volvo cars more desirable than ever, and we might have something really exciting coming from the Swedish car maker. Just take a look at how VW build up the Audi brand.
Should have a little bit more flamboyance in their products, especially in the exterior & interior design. And the German makers have presence in almost every car segment – from Hot Hatch to Limo.
Geely must learn it good from VW, and not only vovlo will be going places, their own will too!
Kneel before the Chinese economy .
China will bring the world to their knees with their sheer economic powerhouse.
No weapons needed, no war needed.
JUST RM but with a B —- RMB
Hope this will give an advantage to the Geely
to produce more quality and acceptable car for the world market.
And in the same time keep the legacy of the Volvo companies that have been known of producing a higher quality and innovation car through out the history of automobile.
i sense later down the road, there will be conflicts between the european team and the chinese. eu will be forced to claim back whats they ve lost.
The Volvo Swedish & Belgium employees can feel relief now for still securing their jobs as Volvo still retain their headquarters and manufacturing presence in Sweden and Belgium. No more worry of China people taking over their jobs.
Aggree, those Volvo manufacturing sites in Europe must be retained to cater for the two most discerning/demanding customer regions – US and Europe!
swedish car companies now all owned by foreigners. what is next, ikea?? ha ha ha
Geele is awsome. I wish them the best!