After Ford announced that it will sell Volvo to Geely, many have raised concerns on the future health of the Swedish carmaker. As a response, Li Shufu, founder and chairman of Zhejiang Geely Holding Group, parent of Geely Auto says that Volvo’s current production, R&D facilities, union agreements and dealer networks will all be left intact, quotes a Reuters report.
“If the deal succeeds, nothing will change for Volvo, except the boss turns to Li Shufu,” the head honcho told Xinhua news agency. “Volvo and Geely will be two independently-managed brands.”
He said the Volvo purchase would help Geely, which is China’s largest private automaker, develop “new energy vehicles”, and that Geely would help Volvo reduce production costs and expand in China. “The new energy-powered vehicle will be the future of the world’s auto industry. But based on current investment in research and development, China will be left far behind the pace of developed countries,” the 46-year old Li said.
Ford expects the deal, which is estimated to cost Geely $1.8 billion, to be signed in the first quarter of 2010. Ford paid $6.45 billion for Volvo in 1999.
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Volvo with its reputation "the safest car"…
hmmm….
1st????
Last time the Volvo employees did suggested they themselve wanna buy the volvo company, seem hard to collect the money.
Ford paid $6.45b for Volvo, while Geely paid $1.8b for Volvo. That's a $4.65b difference. At least they not sold it for $1. :-)
I believe this sold has tarnished a bit Volvo's brand and pride. Sales could drop after this. More companies will consider Volvo brand as their bosses car and eventually go for Merc/BMW/Audi. At least a good news for the germans distributors, a competitor slipped down a bit. That is how corporate world works. BTW..just my prediction..
Instead of spending billions in F1maybe the G should have bought Volvo instead. Perhaps Volvo can help Proton to improve instead of their 'Lotus handling' selling point that has been around for decade……..just my few cents.
did we know about total debt in the company? could it be more then 6.45b?
volvo will then be known as GELI-GELI (in respect of the owner Geely)
US economy is deep shit
Swedish economy is deep deep shit
Japan economy is deep deep deep shit
soon Toyota, Honda, Yamaha, Kawasaki is up for sale
who going to bail them out?
exactly my thoughts azrai lol
I thought it is 18 billion.
for sure things will change for volvo. geely will have easier effort to develop new modern cars since they have access to volvo tech, but volvo will have hard time to keep the brand perception intact. geely can help volvo reduce production cost, but a cheaper volvo will erode customer trust on the brand, i think.
the germans must be looking for the opportunity to take over the 'safe' brand perceptions that volvo has developed all these years.
bear in mind that as far as the products are concerned, the new volvo xc60, the new v8 engine powering both the xc90 and the S80 are quite good products add that with their reputation and breaking ground safety, it sure is a good for geely. on top of that the S60 which is under development is going to be an attractive package. SO in terms of product development, the swedish company should be able to survive for at least another 3 years. the only problem that it had was that GM was not able to keep operating costs low despite of the platform and joint development with ford. perhaps this could continue and the chinese could work their magic on cutting operational costs while of course maintaining the reputation and quality of volvo cars.
exactly my tots odi…
They should sell it to Renault. Otherwise everything will change for Volvo. I'm surprised that the other Volvo company isn't worried about the brand dilution.
PSA could be a good fit too, but they are busy buying MMC. Unfortunately Renault had a bad 2009, and they are investing in AutoVAZ, but Volvo would be like Audi for VW, and they could use the dealerships to return to the US. Renault can compete at every level with VW.
Renault vs. VW and Seat
Volvo Cars vs. Audi
Volvo Group vs. Scania and MAN
Nissan vs. Suzuki
Dacia and Lada vs. Skoda
Renault Samsung vs ???
??? vs Bentley, Bugatti and Lamborghini
While Volvo makes bigger cars than Renault, there would be additional platform sharing with Nissan/Infinity. But after a bad 2009, $1.8B seems like a lot of money, plus they would have to invest to break even.
well, who knows. maybe Volvo will gain a huge market share in China and in turn has the much needed capital (and volume) to compete with other brands.
odi862 said,
December 30, 2009 @ 2:33 pm
Instead of spending billions in F1maybe the G should have bought Volvo instead. Perhaps Volvo can help Proton to improve instead of their ‘Lotus handling’ selling point that has been around for decade……..just my few cents.
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I AGREE !
Now buying a Car company is cheaper than investing in F1, or the Govt should have bought SAAB too~
Not need to buy these car companies because they are probably in dept. It is too costly.. paying bills, wages, depts and employee pension schemes. But it would be a good idea to buy just one model to replace Perdana.
I-HATE-GG889933000-GOVERNMENT said,
December 31, 2009 @ 2:18 am
odi862 said,
December 30, 2009 @ 2:33 pm
Instead of spending billions in F1maybe the G should have bought Volvo instead. Perhaps Volvo can help Proton to improve instead of their ‘Lotus handling’ selling point that has been around for decade……..just my few cents.
—————————
I AGREE !
Now buying a Car company is cheaper than investing in F1, or the Govt should have bought SAAB too~
———–
Do you think if the world would allow a foreign government to buy a company in another country, if yes then even the Vietnam gov't can buy it for 1.8b, it's not a small number for most of gov'ts. But only China has the market to survive Volvo. I dont think Chinese consumers would buy Vietnam's Volvo or Malaysian's Volvo products
Guys, China itself is a big market for Volvo. So, they can get the volume in China, then they should be ok.
Respect to Chinese company. This is what we call a real car manufacturer. What Proton get? Nothing. Ptuiii
Look at it another way – when owned by FORD, Volvo have limited funds for R&D becos FORD got no cash. Now under Geely, Chinaman can give Volvo lot of cash to do R&D. With more cash, maybe Volvo can design better cars than BMW!! Then sell a lot of Volvo in China, big economies of scale, can reduce cost, sell cheaper. Good for everyone. Ha! Ha! who knows, right?
onYep said,
December 31, 2009 @ 9:14 am
Respect to Chinese company. This is what we call a real car manufacturer. What Proton get? Nothing. Ptuiii
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You call Geely a real car manufacturer? LOL.
They only took it from others. by using money they got from exporting faked goods, unsafe products, polluted here and there, pirating other nationalities intellectual and etc. All of it hv been protected by their gov and their own law.
Eventhough Proton owns Lotus, Proton still has respect on them, respect on what have their engineers/non engineers sweat for and i believe British intellec property law isn't like Chinese. Thats why Proton only co-operate/sharing knowledge and give them freedom on their products.
At least Proton still has what we call MORAL.
Hopefully it's not another Ssangyong fiasco.
very very sad
Fabregas,
Just becoz China have a lot of cash, envy? Why not u bought Volvo up for Proton?
Littlefire,
i was referring to the statements "This is what we call a real car manufacturer" and "What proton get?" from onYep.
Do you think Geely has enough experience and quality to be called a real car manufacturer? I heard about this Geely firm just about a year/two yrs ago and I am not sure for how long Geely has been in motoring world. But for me, if you want to be a real car manufacturer, your brand must be well known enough and generally/internationationally agreed about your product's quality.
Even for Proton to be involved for 25 yrs, most of you still bashing and disgrading them and i admit at some points, Proton is left behind. But this experienced Proton doesn't deserve this humiliation from unexperienced/millionaire backed Geely.
If you were EPL maniac, you must be agreed with me that Man City and Chelsea don't deserve true glory and pride because they used money to achieve it, not through investing in young talents and not to keep patient waiting for their hard training paid off.
Same case here, Geely used money to be reckon as " a real car manufacturer" in one night. Are u be kidding me.
If i hv money, i wont buy Volvo for Proton. I ll buy Volvo for myself and the first market i m gonna enter is China :)
my next thoughts.. since Geely's chairman mentioned to have cost effective mfg of Volvo car's.. will the price of the car and spare parts come down? i know the cheapest Volvo's S40 is around the range of RM 160K
I don't think Geely is a real car manufacturer.
agree with fabregas..proton does deserve the pride..but geely??
From my limited observation, whist I was visiting Shanghai 3-months back, it is pretty apparent to me that the Chinese love Audi's. Everywhere I go, loads of Audi's. Actually it was during this trip that I came to appreciate the Audi more as an A6 was used to chauffeur me around town. Merc comes in 2nd (even then the E & S class only, very few C's, A's & B's). Also, there are very limited Beemer's arounds. If there were, only the bigger type (i.e the 7). I drive a Volvo back home and to my surprise during my 7-day trip, not a single Volvo was spoted. Frankly, Volvo have always been marketed for its safety. I'm sceptical if the Chinese will latch-on to this. I have a feeling the Geely people will re-badge the S40, S60, S80 & others to Geely for the Chinese market to sell. I may be wrong.
geely will likely rebadge the volvos…im afraid to cut cost,n to gain the market share,geely will also cut off the things we see in volvos today..maybe those top-notch safety features??
Perdana replacement is coming…
just relax…
When IBM sold its laptop division to a Chinese company, everyone criticized it saying the quality will go down the drain. Years later, Lenovo notebooks are still one of the best and most durable business class notebooks around.