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China's Geely completes Volvo purchase

China's Geely completes Volvo purchase

Published: 02 Aug 2010 10:40 GMT+02:00
Updated: 02 Aug 2010 13:21 GMT+02:00

Geely Holdings formally completed its deal to buy Sweden's Volvo Cars from US auto giant Ford at a ceremony in London on Monday, the Chinese firm has confirmed.

The Swedish brand will keep its headquarters and plants in Sweden and Belgium, and its management will retain its autonomy under a board headed by Geely Group chairman Li Shufu, Geely said in a statement.

"This is a historic day for Geely, which is extremely proud to have acquired Volvo Cars," Li said in the statement.

"This famous Swedish premium brand will remain true to its core values of safety, quality, environmental care and modern Scandinavian design."

Li earlier told China's official Xinhua news agency that he hoped to see the struggling Swedish brand regain its former strong reputation.

"After the takeover, Geely remains Geely and Volvo is still Volvo. The relationship between the two companies is brotherhood and not a parent-and-child relationship," Li was quoted as saying.

Geely, which first agreed to take over Volvo in March, has said it will

spend $2.7 billion on the deal -- the original price tag of $1.8 billion, plus $900 million in working capital to improve the brand.

Ford owned Volvo for a decade.

Both the European Union's competition watchdog and China's commerce ministry gave their approval for the takeover last month.

Geely has said it plans to expand the presence of Volvo -- known for its sturdy, family-friendly vehicles -- in China, now the world's largest car market.

It also plans to target the European and North American markets.

Geely has become one of China's biggest private car makers since launching its auto manufacturing business in 1997. It has annual production capacity of 300,000 cars but has sold fewer than 200,000 abroad since 1997.

Dong Yang, executive vice president of the China Association of Automobile

Manufacturers, told Xinhua that maintaing Volvo's brand and product quality would be a difficult task.

He added that raising Volvo's market share in China and adapting the European brand to China would not be easy.

"All of these things should be realised step-by-step through hard work," Dong was quoted as saying.

Shares in Hong Kong-listed Geely Automobile rose 5.86 percent to 3.07 Hong Kong dollars (40 US cents) on Monday.

AFP/The Local (news@thelocal.se)

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Your comments about this article

15:58 August 2, 2010 by Eagle63
Very sad indeed....

Luckily there still is SAAB......
02:53 August 3, 2010 by volvoman9
No need to panic just yet. Let's see what they offer. It would, I agree, be such a shame to lose the quality and style of Volvo as well as the innovation but it's a done deal. One can but hope for the best.
05:50 August 3, 2010 by porksteak
Three Volvos in my driveway currently. I don't need a new car for a while. I can wait and see what happens.
12:20 August 3, 2010 by arnuxii
Capitalist China wins against socialist Sweden as expected.
13:29 August 3, 2010 by LeoKinmann
@arnuxii

good thing you dont consider China communist, like so many other Swedes do. besides, China is more like the exact opposite of a communist country now.
15:55 August 3, 2010 by rba
China is more capitalist than the US, let alone compared to Sweden.
07:23 August 4, 2010 by Marvino
I have commented in the past how much I dislike the Chinese takeover of Volvo and I am really sick in my stomach about it. Sick because Ford ignored all bids from Swedish groups and decided to sell to a Chinese company. Sick because the Swedish government let it happen, and because the EU approved the sale of a European brand to a communist country. Ten years from now Volvos will be built only in China under the Geely name and Ford will cease to exist as a company because China will either kick them out or simply swollow them to avoid competition. With this I rest my case, and will never again say a word.
09:43 August 4, 2010 by LeoKinmann
alright, then STFU.
17:04 August 4, 2010 by Paul0075
Well it's going to be interesting over the next few years.

I am just pleased my Volvo has a nice big label under the bonnet that says Made in Sweden.
12:32 August 6, 2010 by tuerd1982
It was really astonishing to see a such small company can able to buy volvo. The time is flying.
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