Official: Ford Completes Sale Of Volvo To Geely

May 5th, 2010

It’s official. Ford (NYSE: F) today announced the sale of Volvo and related assets to the Zhejiang Geely Holding Group Company Limited (Geely) was completed.

The total purchase price for the Volvo and the assets contained in an agreement signed back in March was 1.8 billion U.S. dollars, including a $ 200 million note and the balance in cash, the cash portion is subject to customary purchase price changes in shutdown. To date, the note Geely issued and paid approximately 1.3 billion U.S. dollars in cash to complete the sale.

Under the terms of the sale with Volvo, Ford will continue to work in different areas to ensure a smooth transition, but will not retain any ownership in the Volvo business. Ford will also continue to provide Volvo powertrains, stampings and other car parts for an indefinite period of time, and provide technical support and access to information technology.

As for the intellectual property of Volvo, developed in collaboration with Ford, Volvo will purchase state sublicense to certain parts of this intellectual property to third parties, including Geely. The list of Volvo’s most likely the array radar-based security, Powershift dual clutch technology and forced induction drivetrain knowledge.

Also as part of the deal, the current chief Stephen Odell, Volvo will return to the Blue Oval, as the current Volvo CFO Stuart Rowley. Odell will now head European division of Ford, and Rowley will act as CFO.

When the deal will allow future Geely Volvo’s lineup is uncertain. The Swedish automaker recently unveiled its 2010 XC60 crossover and a new C70 Convertible, and the all-new S60 sedan 2011 to come later this year.

Sources close to the Geely already shown that the Chinese owner Volvo would two or three larger and more luxurious models to launch within the next four years to try and increase global sales, ultimately hoping to one million car brand within five years . Volvo currently sells about 400,000 vehicles a year worldwide. Certainly very ambitious, but with access to the lucrative Chinese market Geely could build and sell up to 200,000 vehicles annually for sale in China only.

According to a previous report, Geely hopes to start producing Volvo cars in a new factory in Guangdong province in China. Volvo sources have told that a future relationship with China would leave Sweden as the center of product planning, marketing, and some initial engineering. China-based Geely engineers would conduct mid-level engineering and manufacturing development in a savings of up to 30 percent of the high cost of Sweden. Volvo would also be a model to produce a plant in China Geely brand to expand its global presence, but the goal would be to leverage Volvo’s reputation and brand value, along with lower cost Chinese engineering and production.

In a sad twist of fate for Ford, Volvo has finally begun to make profits after years of losses. In fact, Swedish automaker had a profit before tax of $ 53 million in the second quarter, compared with a loss of 237 million U.S. dollars in the same period one year ago.

Incoming search terms for the article:

geely vs kia vs chevrolet vs hyundai (1),rowley stuart ford (1),stuart rowley ford (1)

Related posts:

  1. Ford’s Sale Of Volvo To Geely Is Expected To Close Next Week
  2. Ford Explorer: New Niche Approach Fits The Times
  3. 2011 Ford Explorer Won’t Get Award-Winning Sport Trac Version
  4. 2010 Ford Flex EcoBoost
  5. Ford Explorer Priced From $28,995

Leave a Reply

  • Tags