Ford sells Volvo to Chinese auto maker Geely

By Rod Cleaver

No longer simply content to “borrow” designs from foreign automakers, the privately run Chinese automaker Geely has agreed to purchase Volvo from Ford’s Premier Automotive Group for a reported US$1.8 billion.

Volvo S60

The takeover underscores China’s arrival as a major force in the global auto industry and ends nearly two years of talks with Geely over Volvo –  the last sale from Ford’s former premier group, which also held Aston Martin, Jaguar and Land Rover.

Geely reported that it had secured all the necessary financing to complete the deal and “significant working capital” to fund Volvo’s business.

The purchase amount represents a significant loss for Ford, having purchase the Swedish car maker in 1999 for US$6.5 billion. That being said, the influx of cash will help Ford bolster its core business and take a significant liability off its hands.

While Geely plans to maintain the brand as a separate company and leave its operations in Sweden, a new factory will be built in Beijing to produce Volvos for the domestic market.

Rod Cleaver has a varied background including 10 years with CAA Central Ontario. He has been an Automotive journalist for the past 5 years, including his current post as the Automotive Editor of a local community newspaper.