Geely
Geely to build an R&D centre for Volvo in Shanghai
Geely, the current owner of Volvo has announced that it will setup a research and development facility in Shanghai, China. The company said that the centre will be located at the Shanghai International Automobile City (SIAC) which is situated about 25 kilometers from downtown Shanghai.
This is the same place where the Shanghai Volkswagen Automotive Co. and Shanghai Automotive Industry Corp call home. “We have reached a deal and the R&D center will be built in our automobile city,” said Xu Ming, vice general manager of SIAC at an automobile electronics forum held last month.
He also added the centre will be called the Geely-Volvo Research and Development Center. Unfortunately we don’t have more information to share with you including a possible launch date. There are also rumors circulating that Geely is scouting possible sites in the country for a Volvo assemble plant.
It’s confirmed: Ford sells Volvo Cars to Geely!
It’s confirmed! Negotiations have been going on for some time already, but now Ford has entered into a “definitive agreement” to sell Volvo Car Corporation to China’s Geely. The Swedish carmaker and its related assets (mainly intellectual property) will cost Geely US$1.8 billion and the sale is expected to close in the third quarter of 2010, subject to regulatory approvals.
The Detroit based automaker said that it will continue to cooperate with Volvo to ensure a smooth transition, but will not retain any ownership. To be exact, Ford will continue to supply Volvo Cars with powertrains, stampings and other vehicle components, besides providing engineering support, information technology and access to tooling for common components, among other things.
There are agreements in place to govern the use of intellectual property, which will “allow both Volvo and Ford to deliver their business plans and provide appropriate safeguards against misuse”. Volvo will be able to grant sublicenses to certain portions of Ford’s intellectual property used by Volvo Cars to third parties, including owner Geely.
“The Volvo management team fully endorses Ford’s sale of Volvo Cars to Geely. We believe this is the right outcome for the business, and will provide Volvo Cars with the necessary resources, including the capital investment, to strengthen the business and to continue to move it forward in the future. Geely has been very supportive of Volvo Cars’ business plans and management team. We look forward to building a strong relationship between Volvo Cars and Geely, and to maintaining a strong relationship with Ford in those areas where we will continue to work together to ensure a smooth transition,” said Stephen Odell, CEO of Volvo Cars.
Geely secures financing worth US$ 2.1 billion for Volvo deal
Geely, the Chinese company which is set to take over struggling Volvo from Ford has secured financing for the purchase. The financing is said to be worth US$ 2.1 billion but the source of the sum was not disclosed. With this Geely is likely to seal the acquisition by end of this month.
Reports are also suggesting the Geely will maintain Volvo’s production hub in Sweden however some are saying the the Chinese company will shift production to China. If this happens about 16,000 workers in Sweden may lose their jobs. As for setting up production in China, a 300,000-unit production is expected annually. This number is almost double Volvo’s current output worldwide.
