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Chinese firm close to Volvo Cars bid: report

Chinese firm close to Volvo Cars bid: report

Published: 06 Aug 2009 10:37 GMT+02:00
Updated: 06 Aug 2009 10:37 GMT+02:00

Chinese automaker Geely is putting the finishing touches to a bid to become a majority owner of Volvo Cars as head of a consortium that will also include an undisclosed Swedish investor, Swedish business daily Dagens Industri reports.

The Swedish automaker's current owner Ford Motor Company is likely to remain a minority shareholder.

DI reports that Ford's board of directors is expected to make a final decision regarding the sale in August. A source close to the sale told DI that internal consensus in Ford will determine who will become Volvo Car's new owner.

Under the guidance of British investment bank Rothschild, Geely has presented a comprehensive outline for the future of Volvo Cars. Several former high-ranking Volvo employees, including previous chairman Pehr G Gyllenhammar and former head of Volvo Cars Hans-Olov Olsson, are involved with Rothschild in various capacities.

Sources told DI that Geely is well-prepared to build up Volvo Car's operations in Sweden and Belgium, and would be an important gateway into the Chinese market.

In June, media reports circulated that Geely had reached an initial agreement with Ford for the purchase of Volvo Cars. Several Chinese newspapers reported that Geely Automotive Holdings planned to buy Volvo and produce a new model of the traditional Swedish brand in China’s Guangzhou Province.

At the time, representatives of both Volvo and Geely said they no knowledge of any agreement to sell the Swedish automaker to Geely. Ford also said the reports were merely market speculation and that they continued to discuss the future of Volvo with a number of interested parties.

Charlotte West (news@thelocal.se)

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Your comments about this article

17:11 August 7, 2009 by randyt
"... and would be an important gateway into the Chinese market."

Be carefull Sweden, the Chinese will never allow you to make a car in Sweden and sell it in China without a product killing tariff. They will make Volvo build cars to sell in China, in China! No jobs for Sweden. Just ask GM.

So stockholders may make some cash, but not your workers.
17:12 August 7, 2009 by 2394040
Although I don't live in Sweden (USA actually), I'm very familiar with this. I've seen far too many American jobs leave this country, including several I was involved with, to believe that this sounds good.

If Geely builds even one Volvo model in China, there will be more with the passage of time.

I sincerely hope that the Volvo employees in Sweden have saved some of their earnings over the years. Because if this deal is finalized, they will need those savings.

Ford might say that this is just market speculation, but when it comes to money, China would have the advantage. With 700 million Chinese living on very low wages, how could it NOT have an advantage? Not that the Chinese will be buying a lot of them, though. No doubt what we are looking at is a very low-priced model, but most Chinese could no afford them. These will be for worldwide export most likely.
11:30 August 10, 2009 by voidplay
There is often a feeling in the west that the chinese are responsible for the loss of jobs. True but not entirely, these jobs that made the west prosperous existed because there where no competitors elsewhere in the world. People (elites) in the third world and the middle east bought western goods (cars, planes and weapons) and instead got cheap raw materials (fruits, oil, cotton).

These raw materials are cheap because they are commoditised and because western money is over rated in value. If USA forces Saudi to increase oil production oil prices drop. Yes raw materials is cheap in the west because they have money, money which is of no use to most people in the world except the elites. Most Nigerians can not afford to buy their own oil because they do not have $$.
03:40 August 13, 2009 by Leprehcaun
How can I make this nay more clear?

If ford sells Volvo to China, I'll throw a burning American flag into the American embassy (in case it isn't obvious and in case someone would do it I really need to add that I'm joking/lying. I would never forgive them though).
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