China’s Ministry of Commerce and its National Development and Reform Commission has signed off on a deal that will let Chinese carmaker Geely to purchase Volvo from Ford for $1.8 billion.
“We have received all approvals required from the central government,” Ning Shuyong a spokesman from Geely, told Reuters. “We are currently working on closing the deal.” China’s tight state control of the economy means that government approval is essential for any deals of this nature.
Geely is expected to help double Volvo’s output by investing in a new Chinese factory to produce cars under the Swedish nameplate. Geely is said to be willing to spend another $900 million to ensure that Volvo stays competitive. Currently, Volvo assembles the S40 and S80 sedans at the Ford-Chongqing Changan Automobile, but will likely have to move production due to the sale.