Geely Closing in on Volvo?
June 19, 2009
By Bill Visnic
Yet another news report says, through a Chinese news agency citing anonymous government sources, that Chinese automaker Geely has signed a deal to purchase Volvo Cars from current owner Ford Motor Co.
Volvo and Geely are silent on the latest report, but neither company issued a denial. Volvo's official response, which could be interpreted either as dismissive or a Nordically stoic quasi-confirmation, was to call the report "speculative."
The report says the two companies continue to hammer out details, with the most intriguing aspect being that Volvo reputedly will add more Chinese production in a yet-to-be-built plant in the city of Dongguan in China's Guandong Province. Volvo Cars China already produces the S40 domestically and in March added a version of the S80 flagship at a factory in Chongging.
Volvo sold 12,640 cars in China last year. Of the total, 5,811 were domestically produced.
Geely reputedly is prepared to invest some $10 billion in Volvo, which would include investment in the new Chinese plant as one site to produce the next-generation XC90 crossover in 2011. The translated report seems to indicate a domestically produced XC90 could be one-fourth the cost of similar imported models, as import duties on imported vehicles in China are exorbitant.
Volvo's response to the report of the Geely sale:
"An announcement related to the sale of Volvo Car Corp. would only come from Ford Motor Company. As of today, neither Ford Motor Company nor Volvo Car Corporation in Sweden has made any announcement regarding the sale of Volvo. Reports of such a sale by any media outlet are speculative and, therefore, are not accurate."
Photo by Volvo Car Corp.
1. The S80L, a longer-wheelbase variant of the Volvo's S80 sedan, began production in China in March.
Posted by Bill Visnic at 2:23 PM under Business , Companies , Ford , In the Media | Comments (0) | digg this | Seed Newsvine
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