China's Geely Automobile has recently announced it will acquire 100 percent stake in Ford Motor's Volvo unit, following the Chinese car maker being named by Ford as a preferred bidder for its Swedish top-end car brand. Geely said Volvo will retain ownership over key technologies and intellectual property that it has developed and will retain access to all of Ford’s intellectual property that Volvo had been planning to use to implement its business plan.
Geely would obtain Volvo's key technologies and intellectual property through the acquisition and would also be eligible to use some Ford-owned technologies held by Volvo, including those relating to safety and environmental protection.
According to Geely's spokesman Yuan Xiaolin, Geely Group chairman Li Shufu and executives have visited Volvo's two major production bases in Sweden and Belgium, and discussed the takeover deal with Volvo's executives, senior officials of the Swedish and Belgian governments, and representatives of Volvo's workers unions. Yuan adds that Geely is committed to protect the brand and value of Volvo, especially the brand's advantages in its product quality and safety, as well as brand management and engineering technologies.
On the assumption that Geely successfully acquires Volvo, Yuan emphasizes, the luxury brand will maintain the independence of its management under Geely.
Yuan also disclosed that Volvo will retain all its manufacturing and research facilities along with its dealership network and its agreements with the labour union, meanwhile, it will further improve its sales network and sourcing channels in the China’s automotive markets. Geely will help improve the luxury brand's competitiveness in China with its deep understanding of the market.
Volvo realized worldwide sales growth of 6.9 percent year on year for the third quarter in 2009 and its sales in the Chinese market grew 57 percent from January to October of this year over the year-ago period.
Next year, Volvo will continue to expand its dealership network in China, by introducing the new S60 model into the market.
Undoubtedly, the Chinese market is the key to Volvo's recovery, however it remains to be seen where the bidder from the East will bring the upmarket brand.
