REPORT: Chinese government approves of Chery's bid to purchase Volvo
If, like us, you've been following the Volvo saga pretty closely, you'll remember that several Chinese companies are considered to be among the top bidders for the Swedish automaker when Ford officially opens the bidding. Although Geely has said they aren't interested, that didn't rule out other Chinese outfits.Well, today we have word via Chinese news reports that Chery, for one, has been given the greenlight to enter the Volvo lottery by the Chinese government. Other interested parties are rumored to be Dongfeng Motor Group and Chongqing Changan Automobile Co, along with a "European constellation," whatever that means.
Ford is looking to recoup the bulk of its initial $6.45 billion investment when it sells Volvo, so that might put it out of Chery's league. But who knows? Chery Auto just got a 10 billion yuan ($1.47 billion) loan to help it grow globally and was also given a line of credit by the bank, so only time will tell.
[Source: Gasgoo]
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Reader Comments (Page 1 of 5)
AntBee 6:02PM (3/06/2009)
NOT THE CHINESE!!
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Sektor 6:33PM (3/06/2009)
What difference does it make if they are bought by a Chinese company? They'll be competitive eventually; if they buy Volvo it just means a bit sooner rather than later.
hypermiler 10:41PM (3/06/2009)
@ Sektor
Chinese loot technology and assets, then ditch the remainder. Let us recall MG Rover and Ssangyong.
tekd 4:47AM (3/07/2009)
@hypermiler
Let us recall MG Rover?
Yes I recall how SAIC made MG actually competitive again price-wise, and still assembles cars at the Longbridge plant in England.
And I recall that the MG brand is alive and well, and tons of new cars are slated to launch under the brand.
How exactly was the Chinese takeover of MG and Rover's assets a bad thing at all? The two options were basically to not exist, or to have a running factory in England and a healthy brand that's expanding globally...the fact that you're so biased against the Chinese that you would choose the former is ridiculous.
What exactly do you want from people who buy companies anyway? Rainbows and unicorns? If it's so damned easy to buy failing car companies and refuse to ever cut them off like Ssangyong why don't you go and buy Volvo with your piles of infinite cash to burn.
So seriously, all the whiners, why don't you step up with your giant bags of fantasy money to run fantasy businesses that don't need to make money or sell cars in volume to survive. Oh wait, because in the real world you invest in businesses because you want to make money, not cater to the racist fanboys of failing brands. And you try to do it as nicely as possible, but it's not like turning yourself into a sinking ship to save some obscure brand you bought (Ssangyong) is a great business idea. Ssangyong made and makes pretty terrible cars, and continued to bleed money, so what do you want SAIC to do? How is what they did anything different from what Ford is doing to Volvo or GM is doing to Saab? If someone wants to buy Ssangyong they can, but their parent company can't afford to just prop them up.
But because they're Chinese it's a double standard? They're expected to keep failing brands on-board forever and ever? Jackass.
tommygrindin 9:12PM (3/07/2009)
@tekd
Ford has provided ALOT for Volvo. GM for Saab, not so much. GM just pillaged Saab's technology instead while giving them a Trailblazer and a Subaru and not only letting their volume models rot, but continuously decontented them to save on costs.
The problem is whether this would turn into a Ford/Volvo situation or a GM/Saab situation.
We still don't know the effect on MG's sales. Also, how did MG cut costs while still maintaining both sales and quality? Keep in mind... cheaper does NOT automatically = better
Even though Volvo needs to save on costs, they can't afford to decontent their cars. They need quality materials and features in order to compete with their competitors.
And people calling Ssangyong a failing car company, how was their pre-SAIC situation any different from where Volvo's is now or many other automakers during this current economic crisis?
John 6:13PM (3/06/2009)
Many people have the wrong perception that the government gives them unlimited amounts of money which is false. Right now our own communist leaders here in the US are giving out more money to companies than the central government in China is to their auto companies.
I just don't see Chery biting off this much but then again Tata bought Jaguar Land Rover......
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volvfan88 6:13PM (3/06/2009)
this can not be happening, Volvo Cars is finished for sure if the chinese gets them. i would love it if they could be bought by a consortium of investors and AB Volvo has guarenteed to be minority or share owner.
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no. 6:43PM (3/06/2009)
How exactly will Volvo be "finished"? Volvo will be a treasure chest for both Chery and the entire Chinese car market. China has a lot to learn in the safety department, and this will give the worldwide auto competition a huge boost.
If Volvo were bought by a "consortium of investors", or worse, a private equity firm, it would probably be finished. Jaguar is doing great because Tata isn't changing anything, just learning . Chery will do the same with Volvo. On the other hand, however, look what Cerberus did to Chrysler.
I'm glad someone is finally taking Volvo off of Ford's hands, and I'm glad a REAL automaker is doing it, not profit driven accountants. Ford got what it needed, and now its time to let go.
AltairDusk 7:59PM (3/06/2009)
Bye bye volvo...
No. Did you seriously just call chery a REAL automaker? O_o
DJ 6:29PM (3/06/2009)
Chinese government approves this, but the Sweidsh government will block it. Eventually, Volvo will be bought by a consortium lead by the Swedish gov't, private equity and another European automaker. SAAB will probably be allowed to die or become part of Opel in the overall GM restructing once they declare bankruptcy on Sunday.
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Swede 8:00PM (3/06/2009)
That makes absolutely no sense. Ford is looking for a buyer, Volvo isn't looking for a handout, and the goverment have absolutely no say in the matter.
hypermiler 10:44PM (3/06/2009)
@ Swede
Yes, there was a resale government approval provision in the original sales contract. Swedish government can veto the sale.
BigWill 6:31PM (3/06/2009)
Almost everybody is screwed if the Chinese get Volvo (or Saab).
Then again, the thought of a $12K Volvo C30 makes me all warm inside.
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com 6:34PM (3/06/2009)
NOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOO!!!!!!!!!!!!!!!!!!
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Sektor 6:34PM (3/06/2009)
Prejudiced and unfounded remarks against Chinese automakers are getting quite annoying on Autoblog.
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John 6:40PM (3/06/2009)
A big AMEN to that! The immature bashing against Chinese and Detroit drives me away from these pages often.
no. 6:45PM (3/06/2009)
People who haven't taken entry level economics courses are afraid of competition. For the rest of us, we embrace it.
Quattroporte 7:24PM (3/06/2009)
Volvo's interiors might be chrome-free, but watch out for the lead.
http://www.autoblog.com/2009/01/23/volvo-moving-to-chrome-free-interiors/
Ultimately, the lead in children's toys is probably more our fault than the Chinese's. If American companies hadn't moved their manufacturing over there we would have to deal with this problem.
Quattroporte 7:25PM (3/06/2009)
*wouldn't have to deal with this problem.
Sektor 7:32PM (3/06/2009)
It's amazing how people see China as a gigantic factory. Newsflash: there are different companies, with different standards, ethics, QC, ... People who criticize China for low quality products have to realize that pretty much everything is made in China, low or high quality/tech products.
And it's also your fault for buying low quality products; if they couldn't sell them, they wouldn't make them in the first place.