After months of assumptions and anticipation, Geely has official purchased Volvo from Ford Motor Company for $1.8 billion, over $4.5 billion less than Ford paid for the Swedish car manufacturer just over a decade ago.
Geely, a Chinese company, wanted to bolster their position in Europe and purchasing Volvo is a step in that direction. While China is currently the top automotive market, Geely was unable to crack the top 10 in sales there. The technology and brand awareness associated with Volvo will help them move forward there and overseas.
The Chinese company will allow Volvo to operate largely independently. Volvo will keep open its manufacturing plants in Sweden and Belgium while looking to open facilities in China.
“China, the largest car market in the world, will become Volvo’s second home market. Volvo will be uniquely positioned as a world-leading premium brand, tapping into the opportunities in the fast-growing China market,” said Li Yizhong, China’s minister of industry and information technology.
Despite the loss from the original purchase price, this is considered a win by a company trying to strengthen its primary brands, most notably Ford itself.
“We think it’s a fair price for a good business, and yes, we’re happy with the deal we’ve achieved with Geely,” Lewis Booth, Ford’s chief financial officer, told the Associated Press. “Volvo can continue to build its business and return to profitability.”
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