Ford sells Volvo Cars to Zhejiang Geely Holding Group

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Source is an e-mail that went out to VCC staff this morning where Ford confirms that they are selling Volvo to Geely.

Press release will be inserted into this post when it is made public. [11:59 and here it is]
FORD CONFIRMS SETTLEMENT OF ALL SUBSTANTIVE COMMERCIAL TERMS TO SELL VOLVO TO GEELY IN 2010

DEARBORN, Mich., Dec. 23, 2009 ? Ford Motor Company [NYSE: F] confirmed today that all substantive commercial terms relating to the potential sale of Volvo Car Corporation have been settled between Ford and Zhejiang Geely Holding Group Company Limited.

While some work still remains to be completed before signing ? including final documentation, financing and government approvals ? Ford and Geely anticipate that a definitive sale agreement will be signed in the first quarter of 2010, with closing of the sale likely to occur in the second quarter 2010, subject to appropriate regulatory approvals.

The prospective sale would ensure Volvo has the resources, including the capital investment, necessary to further strengthen the business and build its global franchise, while enabling Ford to continue to focus on and implement its core ONE Ford strategy.

While Ford would continue to cooperate with Volvo Cars in several areas after a possible sale, the company does not intend to retain a shareholding in the business post-sale.

More details will be made available once the expected definitive sale agreement is signed in the first quarter of 2010.
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I'm not sure what to think. I mean it's a bit hard to swallow that a company whos founder said "A car is nothing more than a sofa and four wheels." is going to be the owner of Volvo, whos owner said "An automobile is driven by people. Safety is and must be the basic principle in all design work."

Is it a clever ruse by Ford to eliminate the opposition, or can Geely really run Volvo? Speculate away!
 
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If Geely lets Volvo do what it does and reaps the benefits of Volvo's obviously superior technology this can be great for Volvo, China is rising fast and Volvo needs a foot in that market..
 
China's Geely agrees Volvo buy, BAIC eyes expansion

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BEIJING/STOCKHOLM (Reuters) - China's automakers Geely and BAIC pushed ahead with plans to harness the technology of Ford's and General Motors' ailing Swedish brands Volvo and Saab in a bid to be global industry players.

U.S. Ford Motor said in a statement on Wednesday it had agreed all substantial commercial terms in a deal to sell its Volvo Car Corporation unit to China's Zhejiang Geely Holding Group, parent of Geely Auto.

"While some work still remains to be completed before signing ... Ford and Geely anticipate that a definitive sale agreement will be signed in the first quarter of 2010," Ford said, adding the deal was seen closed in the second quarter.

The estimated $1.8 billion deal would be the largest overseas acquisition by a Chinese automaker. It follows the recent purchase by Beijing Automotive Industry Holding Co of assets from General Motors' Swedish unit Saab.

Chinese carmakers are taking advantage of a crisis-sparked shake-up of the auto industry, tapping into Western brands while taking advantage of a fast-growing home market, which is seen passing the United States this year.

However, there is still a significant technology gap between domestic Chinese automakers and their global rivals, which has left the Chinese looking for acquisitions of overseas technology and designs as the global auto industry restructures.

BAIC EYES EXPANSION

Beijing Automotive Industry Holding Corp (BAIC), China's fifth-largest automaker, said separately it would launch an aggressive campaign to develop its brand both at home and overseas, after buying the rights to old Saab models from GM.

Saab Automobile itself faces closure unless a last-gasp offer by Dutch-listed luxury car maker Spyker Cars is accepted by GM, which said last week it would begin winding down the brand after failing to find a suitable buyer.

BAIC said it will invest 33 billion yuan ($4.8 billion) in vehicle R&D over three years, after paying $200 million for the Saab technology, including the rights to three overall vehicle platforms and two engine technologies.

"Someone has commented that the purchase of Saab's intellectual property can help cut short the development time for Beijing Auto's own-brand passenger vehicles by 4-5 years," BAIC Chairman Xu Heyi told reporters on Wednesday.

"We basically agree with the view."

AGGRESSIVE GOAL

The Chinese car maker plans to immediately start integrating Saab technology into its vehicles with an aim to sell 100,000 self-developed passenger vehicles in 2011, Xu said.

The sales target is a bit aggressive, said Tan Kunyuan, an analyst at Changjiang Securities.

"It will take at least a year for the market to recognize the brand and BAIC probably would need to modify the appearance of Saab cars to fit with Chinese market demand."

The Beijing-based automaker is in production partnership with Daimler and Hyundai Motor, with most of their joint output for sale in the domestic market. Xu said BAIC sold 1.24 million vehicles in 2009.

BAIC's Saab acquisition includes the intellectual property for Saab's 9-5 and 9-3 sedans and some equipment to make them, leaving the fate of the Swedish-based automaker up in the air.

Spyker Cars is still in talks to buy Saab from GM despite BAIC's development plans, a Spyker spokesman said separately, adding it was positive that Sweden's metal workers' union backed Spyker's bid for Saab.

(Additional Reporting by Alison Leung in Hong Kong, Helen Beresford-Massy in Paris, Jason Subler in Beijing, Gilbert Kreijger in Amsterdam and Simon Johnson in Stockholm; writing by Niklas Pollard; Editing by Jon Loades-Carter)

(Editing by Jon Loades-Carter)
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Source: China's Geely agrees Volvo buy, BAIC eyes expansion | Reuters
 
and what happens to penta? (volvo's boat-department)
 
bone said:
and what happens to penta? (volvo's boat-department)
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I am pretty sure that Ford never owned Volvo operations beyond cars. I know Volvo Truck was not part of Ford's acquisition.
 
gtrietsc said:
I am pretty sure that Ford never owned Volvo operations beyond cars. I know Volvo Truck was not part of Ford's acquisition.
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a friend works in volvo's distribution center, and he has to ship car, truck and boat parts...so there must be some sort of relation left...
 
Naturally they coordinate to some degree, it saves money. Volvo Cars is separate from Volvo Group however, Volvo Group do trucks, buses, construction equipment, marine and industrial power systems, aerospace components and financial services. Volvo Cars does cars. :)
 
AiR said:
Is it a clever ruse by Ford to eliminate the opposition, or can Geely really run Volvo? Speculate away!
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Hopefully Geely is smart enough to not try to "run Volvo" at all. Give Volvo capital in exchange for trickle-down technology, and let Volvo itself come up with new product, marketing, etc (partly funded by Geely).
 
https://pic.armedcats.net/b/bl/blind_io/2009/12/23/fuuuuuu.jpg

Sorry Quiky, but it's accurate in this case.
 
Put it this way, if your parents don't buy the XC60, Volvo moves to China.
 
they could just buy the geely version which will come out in a year
http://img20.imageshack.**/img20/4125/volvoxc60.jpg


i know nothing that blatant will happen. the technology will definitely go over into china though, even though the contract blocks a lot. the chinese cheat, and there isn't really a way to block it.
 
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Mitlov said:
Why would they not buy an XC60 because Volvo was sold to a Chinese company after the XC60s on the lots right now were designed and built?
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long term support. currently, the build quality is superb; however, there is no telling which way geely will take volvo in terms of financial support. there might be dealer closings, parts quality cut in the future, ect.
 
If Geely is smart, they'll let Volvo be Volvo but use the platforms and technology for their own stuff, especially the safety technology. If Geely is stupid, they'll cut funding and it'll be a disaster. But, Proton makes dreary hatchbacks, and yet owns Lotus, so clearly it's possible for a company with dreary products to own one with great ones and not fuck the whole thing up. I'm cautiously optimistic.
 
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