The article “Volvo sale signed by Geely and Ford” talks about the Chinese car maker Geely which has reached an agreement with Volvo to invest 9 million dollar in the Swedish loss-making car maker. This was announced by the founder of Geely Li Shufu on a meeting in Peking. This agreement is the biggest overseas purchase by a Chinese car manufacturer.
Geely will buy Volvo for an amount of 1.8 billion from the American car producer Ford. This deal is a loss for Ford but they hope that the sale of Ford will help them to pay off their debts and focusing on their core business.
Geely has a lot of plans to let Volvo revive and has collected 2.7 billion for the acquisition and the investing plans. In my opinion the deal is a good one for Volvo because the Swedish company was struggling for many years and now they have the chance to take a new start.
Nowadays Volvo has two important branches which are situated in Ghent and Sweden; the Chinese buyer has promised to keep all the employees. I am not sure that the production will take place in Europe because I am convinced that Geely can produce their cars at a lower cost price than in Europe. Furthermore, they will produce cars for Chinese costumers because the demand for cars in China is rising, for example a rise of nearly 50% on the previous year.
With this acquisition it seems that the Chinese car market will become the world’s leading car market.
This blog is based on the following article:
http://news.bbc.co.uk/2/hi/business/8591677.stm
De Bruycker Mathias
2FV4
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It's positive that Geely wants to invest in Volvo, so Volvo can revive a bit. They say that they don't want to fire employees, but I don't trust it. In China, they can produce cars at a very lower price. I hope for the employees in Belgium that Geely keeps their promise.
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