China's Geely Buys Volvo from Ford for $1.8 Billion: HQ in Sweden
Chinese low-end mass production automobile brand Geely has purchased the Swedish premium brand Volvo from Ford for $1.8 billion.
Ford sold Volvo at a time when their domestic stable brands are benefiting from American free-market loyalty. General Motors remains a US brand, but Chrysler was sold to Italian automaker Fiat.
In 2007 Ford sold Aston Martin and Jaguar and Land Rover to Tata Motors Ltd. for $2.4 billion the following year. Divesting Volvo completes Ford Chief Executive Officer Alan Mulally’s strategy of exiting European luxury lines to focus on its namesake brand.
The March 28th agreement includes terms regarding intellectual property rights and supply as well as research and development, the Chinese company said. Geely will help Volvo, whose headquarters will stay in Gothenburg, tap China’s growing market, Li said at a joint press conference with Ford.
Volvo sold 334,808 cars worldwide last year, a decline of 11 percent from 2008 and 27 percent from a peak of about 460,000 in 2007, according to the company. Its sales in the U.S. have risen for nine consecutive months and increased 40 percent this year through February.
The Swedish carmaker has about 20,000 employees worldwide, including almost 14,000 in Sweden. It has about 2,500 dealers in 100 countries.
Chinese Government support for the purchase of an internationally recognized European luxury car operation is the first of its kind in the industry.
Arthur D Little, the consultancy, has predicted that Geely would be one of only five Chinese automakers - out of more than 100 - likely to make it into the "exclusive club of global OEM champions" by 2020.