Geely's Purchase Of Volvo From Ford Officially Done

China's Geely has completed the purchase of Volvo from Ford, marking a Chinese firm's biggest acquisition of a foreign automaker in a deal worth USD 1.8 billion (RM 5.7 billion).With the transaction now finalised, Geely can turn its attention to restoring Volvo to long-term profitability; The Swedish company may have sold 334,000 units in 2009, but still recorded an overall loss.

Previous reports have outlined some plans Geely has in mind for Volvo. For a start, Volvo would launch two to three more luxurious models within the coming four years. To leverage on the huge Chinese demand for cars, Geely intends to inject a further USD 900 million (RM 2.85 billion) into Volvo, in part going to fund a new manufacturing plant in China, with an annual production capacity of 300,000 units. By 2015, Volvo could achieve yearly China sales of 150,000 units and global sales of one million units, if everything goes to Geely's plan.

Despite much protests against the deal by Volvo's unions over fears of the loss of Swedish jobs, they eventually relented after getting affirmation that Volvo will remain a separate brand with its headquarters, production, research and development all to be based in Sweden. The only major change would be the installation of Li Shufu, chairman and founder of Geely whom many nicknamed the Henry Ford of China, as the chairman of Volvo.

With Volvo no longer under its ownership, Ford can focus all resources and finances on the Ford brand, although it will continue to supply Volvo with powertrains, stampings, vehicle components as well as IT and engineering support. As for intellectual property co-developed with Ford, Volvo will be allowed to grant sublicenses to third parties such as Geely for access to any intellectual property, which includes Volvo's PowerShift dual-clutch technology, forced-induction engine know-how and an array of exclusive safety technologies.