- Alfa Romeo
- Aston Martin
- Land Rover
In his first press conference as the newly appointed CEO of Volvo, Stefan Jacoby gave a vague outline of where he intends to take the company. Top on Jacoby’s list are improving Volvo’s emotional appeal and looking for ways to work with suppliers and other automakers in the industry.
With ownership of Volvo now having officially changed hands from Ford to Geely, the Swedish automaker will look to develop a plan for profitability and growth. And while it’s domestic rival Saab is looking down market, Volvo will reportedly head in the opposite direction, instead planning a new flagship model that would compete directly with the likes of the BMW 7 Series and Mercedes S-Class.
Geely has officially purchased Volvo, the iconic Swedish automaker, from Ford, in a rumored $1.8 billion transaction. As part of the deal, Ford will continue to supply powertrains and other components for an unspecified amount of time, while both companies have mutually agreed to safeguard each other’s intellectual property.
Ford Motor Co. has announced it has reached a final agreement to sell its Swedish Volvo brand to China’s Geely Holding Group. The sale price is set at $1.8 billion, a fraction of the $6.5 billion Ford paid to buy Volvo back in 1999. The sale of the Volvo brand completes Ford’s corporate strategy to sell-off all its luxurious European brands. In 2008 Ford sold the Jaguar and Land Rover brands to India’s Tata Motors for $2.3 billion, while in 2007 the divestiture began with the sale of Aston Martin for just under one billion. These strategic moves are partially to credit for Ford’s ability to stave off bankruptcy during the recent recession.
“Volvo is a great brand with an excellent product lineup. This agreement provides a solid foundation for Volvo to continue to build its business under Geely’s ownership,” said Ford president and CEO Alan Mulally. “At the same time, the sale of Volvo will allow us to further sharpen our focus on building the Ford brand around the world and continue to deliver on our One Ford plan serving our customers with the very best cars and trucks in the world.”
Li Shufu, chairman of Zhejiang Geely Holding Group Company Limited, commented in a statement that, “Zhejiang Geely would like to pay tribute to Ford’s stewardship of the Volvo brand, and we look forward to continued cooperation as Volvo embarks on the next stage of its evolution with Geely.”
For its part Ford will continue to provide Volvo with certain components (including powertrains) for a limited time, although it will retain no part of the Volvo Cars company. Ford has also agreed to provide support in the form of engineering, tooling and information technology. Both Ford and Volvo have agreed to certain rules regarding intellectual property. The deal is subject to regulatory approval.
“The Volvo management team fully endorses Ford’s sale of Volvo Cars to Geely. said Stephen Odell, CEO of Volvo Cars. “We believe this is the right outcome for the business, and will provide Volvo Cars with the necessary resources, including the capital investment, to strengthen the business and to continue to move it forward in the future.”
Official release after the jump:
According to a recent report, Ford’s sale of Volvo to Chinese automaker Geely could go through as early as February 8th. Ford and Geely have already announced they are working out details of a plan with the latest rumor indicating that the sale could be for as little as $1.6 billion, with a $1.8 billion asking price more likely.
Ford Motor Co. and Zhejiang Geely Holding Group (Geely) have reached a general agreement on the terms of a sale that would see Ford’s loss making Volvo unit sold to the Chinese automaker. An initial agreement is set to be signed in the first quarter of 2010, with the transaction complete in Q2.
Ford’s preferred Chinese bidder to purchase the automaker’s Swedish Volvo unit has announced a plan that would see Volvo doubt its sales in the coming years. Zhejiang Geely Holding Group, which owns and operated Chinese automaker Geely, has said it believes it could boost total sales to close to one million vehicles globally, up significantly from the roughly 400,000 units it currently sells. Included in that increase would be drastic growth in China, where Geely plans to build a factory capable of producing as many as 300,000 vehicles. Geely’s plan would see Volvo sell as many as 200,000 units in China, up significantly from the 12,600 units it sold last year.