Ford Agrees to Sell Volvo to a Fast-Rising Chinese Company

Ford agreed with The Zhejiang Geely Holding Group to sell its Volvo subsidiary.
This Chinese company is willing to pay $1.8 billion for Volvo, with $1.6 billion in cash and the rest in a note payable to Ford.

It is not the first time that Ford sells one of its brands. Jaguar and Land Rover were sold to the Tata Group of India for $2.3 billion a year ago. Ford has changed its strategy to focus on its core brands and that’s why it is selling all of its luxury brands.

Zhejiang Geely is planning to keep the production of Volvo cars in Sweden, but also to build another Volvo-factory in China.

Michael Dunne, an independent auto analyst, says that it Zhejiang Geely made a strong and smart move with buying Volvo. Buying a well-known brand like Volvo is the fastest way for a young company like Geely Auto to move up.

Many automakers in China are loaded with ambition and it is nice to see that Zhejiang Geely is showing those other companies how it has to be done.

I see this shift from west to east in the car industry as a good thing. These young Chinese companies could actually save the car market.

Bram Verstraete

Source: http://www.nytimes.com/2010/03/29/business/global/29auto.html