• Mar 12, 2010
It's going to cost up to $2 billion for Zhejiang Geely Holding Group Co. to take ownership of Volvo, but according to a new report out of BusinessWeek, that lofty figure is just the cost of entry. Volvo union members and the board have apparently told the Chinese automaker that it will need at least $1.4 billion to repair the storied Swedish automaker.
Union head Glenn Magnusson reportedly says the money will be needed for the next year's product development, marketing, production and distribution. Magnusson tells BW that Geely has yet to demonstrate that it has the financials to sustain Volvo, adding "we haven't seen anything yet and we're not satisfied."

Further, Volvo board member Magnus Sundemo feels $1.4 billion may be a little low, adding that Geely will need to invest "at least as much as they're paying to buy us." One reason Volvo insiders feel the company will need plenty of cash is to satisfy Geely's desire to build up Volvo in China, with the goal of assembling 200,000 vehicles per year in The Land of the Great Wall.

Ford Motor Company and Geely, who have been in talks seemingly forever, are looking to get a deal done by the end of March. Regulatory filings are expected to draw out the process of officially handing over ownership of the Swedish automaker to June 30 at the earliest.

[Source: BusinessWeek]


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  • 16 Comments
      • 4 Years Ago
      Sell Volvo! Or merge it with Lincoln! I have no idea why they have two competing luxury segment. Volvo image of safety is gone other companies have also focus on safety now. I have no idea what Volvo have for them. Their I-5 engine (I'm pretty sure it's an inline) is out dated.

      The same with Mercury and Ford. Unless... I'm completely wrong on the segments.

      Still somewhat peeve that they sold Aston Martin.
        • 4 Years Ago
        @ mythicalprogrammer

        ...because outside of North America, Lincoln (nor Mercury) has little brand recognition. Volvo is Ford's "worldwide luxury" label. It'd take a lot more money to convince Volvo customers in the rest of the world that Lincoln is a viable replacement (and vis a vis, if they tried to suggest that Volvo is a replacement for Lincoln here in the states).

        I agree with the sentiments in not getting rid of Volvo; the true "damage" will certainly be when it has no luxury global reach.
      • 4 Years Ago
      RIP Volvo.
      • 4 Years Ago
      Is this some kind of bad joke? Damaged Volvo? Could sby explain me In what way is Volvo "damaged"? With a full range wider than ever, spec better than ever? Do we have to go through again all the inventions that Volvo introduced just this year, pretty much like outperforming even some German rivals? In what way will this joke of a car company "repair" it? With fraudulent and worn down technology from the early 90's? Or how would the Chinese matket EVER come up with the loss of sales all around the world? Geely is selling about 400.000 cars, IN TOTAL. Volvo is already producing in China, so how much would be a realistic growth in the Chinese market after an anquisition by a questionable enterprise like Geely? Lets stop making jokes and please get back to Journalism....
      • 4 Years Ago
      So how much does Spyker have to cough up to turn Saab (which is among the most damaged auto brands in the world) around?

      Oh right, we shouldn't discuss that because Saab is awesome even though nobody buys them and Spyker will make every fanboys dreams come true with nothing but kind words, pixie dust and more rebadged GM vehicles.

      Awesome.
        • 4 Years Ago
        "Oh right, we shouldn't discuss that because Saab is awesome...", no actually we shouldn't discuss it here because it this is an article about Volvo and Geely.

        TriShield, I remember not all that long ago when most of your comments where interesting or informative and being someone who put his money where his mouth was you seemed to have earned a level of respect around here.

        Now you're not just happy trolling SAAB articles, you need to troll non-SAAB ones too.

        If GM has somehow caused you so much pain then I feel sad for you.
      • 4 Years Ago
      See what I mean?
      • 4 Years Ago
      They'll need a lot more than that to convince people that Volvo's safety reputation is still intact, from the country that brought forward the Brilliance sedan that got the worst crash test rating in modern history.
      • 4 Years Ago
      " One reason Volvo insiders feel the company will need plenty of cash is to satisfy Geely's desire to build up Volvo in China, with the goal of assembling 200,000 vehicles per year in The Land of the Great Wall. "

      --> I seem to remember that this _wouldn't_ happen, and only management would be chinese with no changes.
      Now they will be assembling them in China ?


      My eye fell on the new S60 when the lease for my s40 runs out.
      However, if they are made in China I think i'll pass
        • 4 Years Ago
        According to Geely the chinese built Volvo's would be sold only in China. But who knows... maybe (probably) they are lying...
        To be honest I don't want volvo to be sold to a chinese company. Who knows what they will do with the brand after they get their IP...
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