Geely looking for 1M units from Volvo, plans Chinese factory
Should Geely succeed in its bid to purchase Volvo, the Chinese automaker does not plan to spend any time playing in its new Swedish sandbox. Ford moved about 380,000 Volvos around the world last year; Geely wants to sell 2.5 times that amount within five years. How so? By injecting "two or three bigger, more luxurious cars" into the lineup and working its home market of China, which Geely feels could be unlocked for 200,000 vehicles alone. Those units could be supplied by a Chinese factory capable of making 300,000 cars per year and would presumably be larger than the upcoming redesigned S60 (above).
Ford has designated Geely its preferred bidder for Volvo. However, in an echo of the tensions between General Motors and Magna's Russian bidding partner Sberbank, Geely will need to address Ford's intellectual property concerns among other issues to complete a sale. Volvo's technologies and reputation for safety are probably worth as much as the company's physical assets, so it's not surprising that Ford wants to negotiate the technology transfer. Assuming they can come to terms, closing the deal is expected to cost Geely $2 billion.
Gallery: 2010 Volvo S60
[Source: Automotive News, sub. req'd]
Reader Comments (Page 1 of 3)
stealthebeatles 5:16PM (11/15/2009)
Ford had better be careful, or else all the technology they spent money researching will end up competing against them later.
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JB32 5:42PM (11/15/2009)
Why is Ford selling Volvo? And if so why now?
Its the bad car market, Volvo has their best car coming out in the most mainstream car segment. Volvo's better days are ahead. Better to at least wait and get a better price. Or better yet form a JV with Geely keeping 50% of Volvo and gain MORE access for Ford in China in which they lag.
Why sell?
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Jimbo 5:59PM (11/15/2009)
I'd like to see Ford keep Volvo. It's the closest thing they have to a luxury brand now that Jaguar is gone.
Thunderbuck 5:59PM (11/15/2009)
I've been wondering that same thing myself. Jaguar? Range Rover? Aston? Perfectly understandable--all of these contributed more cachet than actual engineering expertise.
Volvo, on the other hand, has a solid engineering reputation, and was contributing significant technology to the rest of the Ford lineup. Geely would be buying themselves a lot of respectability.
anonymous j 11:12PM (11/15/2009)
Apparently, Ford is more worse off financially than they led everyone to believe just because they didn't take govt money. I'm sure Ford would keep Volvo if they could but it's probably just not financially viable for them.
the4thheat 12:09AM (11/16/2009)
"I'd like to see Ford keep Volvo. It's the closest thing they have to a luxury brand now that Jaguar is gone."
Errr...what? Ford would much rather have Lincoln be competitive than to try and resuscitate Volvo.
the4thheat 12:11AM (11/16/2009)
"Volvo, on the other hand, has a solid engineering reputation, and was contributing significant technology to the rest of the Ford lineup. Geely would be buying themselves a lot of respectability."
Yes and now Ford has all that technology and can develop it further themselves without paying the bills to keep Volvo alive. For now at least Volvo is a financial drain more than anything else for Ford.
Victor 2:35AM (11/16/2009)
"Yes and now Ford has all that technology and can develop it further themselves without paying the bills to keep Volvo alive. For now at least Volvo is a financial drain more than anything else for Ford."
Ahhh...Sounds like Daimler to Chrysler a few years back....except that there was nothing to gain from Chrysler.
Jimbo 8:37AM (11/16/2009)
the4thheat: Thanks. I needed a good laugh. Do you honestly think Lincoln is a luxury brand? Name a single model that doesn't have a nearly identical and more affordable Ford counterpart. The closest thing to product differentiation they have is the MKT and that will be a sales bomb. Lincoln is to Ford as Chrysler is to Dodge.
hmmwv 3:36PM (11/16/2009)
You got a good point, I personally don't have much faith in Geely, throwing out big words to attract media attention is pretty typical for them. Triple sales by introducing luxury vehicles?! Give me a break.
whickjames 5:53PM (11/15/2009)
Wow selling the most forward thinking safety minded car company to someone who will more then likely gut such qualities in the name of profitability. I doubt geely has such capacities to continue the quality.
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zamafir 5:57PM (11/15/2009)
i doubt ford cares. ford cares about keeping ford viable and profitable, not about continuing to spend money and resources on volvo for a lot less return.
anonymous j 12:22PM (11/16/2009)
"Wow selling the most forward thinking safety minded car company to someone who will more then likely gut such qualities in the name of profitability. I doubt geely has such capacities to continue the quality."
I don't see what the point of paying $2 billion for Volvo only to "gut" their core competency is, as if Geely has some long standing grudge against them and has set out to destroy Volvo. It's funny to see how brainwashed people are, to think that any company would pay this amount for any company, for the sole purpose of running it into the ground.
Obviously, Geely wants Vovlo's tech, and It'll be interesting to see what people will be saying when Volvo's safety tech becomes cheaper to produce due to mass production and therefore ends up reducing costs across the industry while maintaining standards, if Geely and Ford manage to complete the acquisition that is.
Javanese 5:55PM (11/15/2009)
What, only $2billion for Volvo?!! That's ridiculously cheap!!! I thought ford wanted at least $6billion...
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titan 8:02PM (11/15/2009)
No, they spent 6billion. They want whatever they can to get some cash on hand to prevent going bankrupt should car sales dip now that c4c is done. Even if it isn't the best long term move. :(
Aznauto 6:26PM (11/15/2009)
China is currently no 2 car manufacturer behind Japan, i believe by 2012 it will be World's premier car builder.
Japan:11.5 mill
China:9.3 mill
USA:8.7 mill
Germany:6.0 mill
Source http://en.wikipedia.org/wiki/Automotive_industry
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whickjames 7:30PM (11/15/2009)
premier has positive connotations, lets go with largest volume of production.
Kitko 6:18AM (11/16/2009)
Just one interesting fact - in terms of per-capita production, the largest car manufacturers in the world is Slovakia and its VW, Kia, PSA factories churning up about 800,000 cars a year and actually increasing production. Not bad for a country of 5.5 million.
frankhoffy 6:26PM (11/15/2009)
No Volvo enthusiast wants to see this happen
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Jrejre 6:37PM (11/15/2009)
I really don't want this to happen. If Volvo ends up chinese owned I probably won't ever be buying one. . .
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