China car firm buys Ford's Volvo

Chinese carmaker signs $1.8bn deal to take over troubled US-owned brand.

    Li said Geely would keep Volvo manufacturing
    plants in Sweden and Belgium [AFP]

    China is the biggest and one of the fastest growing car markets in the world.

    Geely says it has already secured financing for the deal and is keen to keep Volvo in operation.

    Layoff fears

    The Chinese firm said that the deal, which Ford initially agreed to in December, included agreements on intellectual property rights as well as supply and research and development arrangements between Volvo, Geely and Ford.

    "Today I am reassuring that Geely is determined to protect and nurture everything that is great about Volvo"

    Li Shufu,
    Geely Holding chairman

    Lewis Booth, Ford's chief financial officer, said his company got a "fair price and were "very happy with the deal".

    But the deal initially caused consternation among unions at Volvo, which employs around 22,000 people worldwide, including 16,000 in Sweden.

    Unions opposed the deal on grounds that it was vague on expansion plans and possible layoffs.

    Geely tried to ally those fears, saying that it would keep Volvo plants in Sweden and Belgium and was considering opening factories in China for the local market.

    "Today I am reassuring that Geely is determined to protect and nurture everything that is great about Volvo. Volvo is Volvo and Geely is Geely," Li said.

    "Volvo will be run by Volvo management, and be strategically independent. They are distinct companies. Volvo is a Swedish business with a strong Scandinavian heritage."

    Rapid expansion

    The Geely group has grown into one of China's largest private car makers since it launched its car manufacturing business in 1997.

    It operates six car assembly and power-train manufacturing plants across China with a combined production capacity of 300,000 cars per year.

    The company also owns nearly 500 dealerships and 600 service stations in the country.

    Geely has an overseas sales and service network of nearly 300 outlets and runs plants in several foreign countries, including Ukraine, Russia and Indonesia.

    SOURCE: Agencies


    YOU MIGHT ALSO LIKE

    The woman who cleans up after 'lonely deaths' in Japan

    The woman who cleans up after 'lonely deaths' in Japan

    When somebody dies lonely and alone, Miyu Kojima steps in to clean their home and organise the mementos of their life.

    Putin and the 'triumph of Christianity' in Russia

    Putin and the 'triumph of Christianity' in Russia

    The rise of the Orthodox Church in Russia appears unstoppable, write filmmakers Glen Ellis and Viktoryia Kolchyna who went to investigate the close ties between the church and Putin.

    The chill effect: Is India's media running scared?

    The chill effect: Is India's media running scared?

    Much of India's media spurns a scoop about the son of PM Modi's right-hand man. Plus, NFL as platform for race politics.