By on March 6, 2009

China’s top economic planner has approved of Chery’s plan to buy the Volvo brand from Ford Motor, Gasgoo says. The report is not confirmed yet by Chery Auto. However, Gasgoo is very close to Chery.

According to Chinese media reports, Dongfeng Motor Co. has also submitted its Volvo-bidding plan to the National Development and Reform Commission (NDRC). The company’s spokesman denied the reports.

On Feb. 12, Chery Auto president and CEO, Yin Tongyao, said that his company would not rule out the possibility of buying a troubled European auto brand. Volvo was believed to be one of the choices.

Chery Auto received a 10 billion yuan ($1.47 billion) loan to fund its global growth from Export-Import Bank of China (China Eximbank) in December 2008. The company was also granted the flexibility of a credit line by the bank.

Ford put Volvo up for sale late last year to raise cash, but has found little interest in the brand, because many potential buyers are facing similar crisis and the nearly $6 billion needed for buying Volvo is a prohibitive price for most carmakers.

The report has been repeated on China Daily. China Daily is the English speaking organ of the government news agency Xinhua.

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15 Comments on “Chinese Government Approves Chery’s Plan To Buy Volvo...”


  • avatar
    guyincognito

    Wow, I am really impressed. Who is this genius at Ford that has been able to convince the Indians and Chinese into taking thes money hemorrhaging outfits? And why hasn’t GM hired this person away?

  • avatar
    Bunter1

    guyincognito-Good thoughts.

    Shoot, the Chinese actually like Buick-how hard could it be to get them to buy it?

    But then selling cars really isn’t GMs strong suit these days.

    Bunter

  • avatar
    menno

    I honestly think there is some true value left in the Volvo name and company, but probably not Saab.

    OTOH, if Saab auto wanted a new owner, and would take the $46.75 I have on my person right now, I’d be willing to fly to Sweden and have a go at running it. Assuming the Swedish government would cancel all debts, and Swedish bankers would bankroll the company with new credit for awhile.

    Also presuming that I’d have free access to the ideas of the rest of the TTAC B&B to help run the thing…

    Seriously, though, Chery has already tried two different ways to get into the US market – and failed miserably. They were working with Malcolm Bricklin’s Visionary Vehicles, receiving a lot of help, and suddenly – kind of like a puppy spying a new bone – ran off to go jump and play with Daimler-Chrysler instead, which didn’t work out so well (especially since Chrysler was in the middle of being dumped in a nasty divorce at the time).

    Perhaps if the Chinese would slow down, learn from experienced hands, not think they can run before they walk, they might gain traction.

    Not sure Chery is a good fit for Volvo, but then again, when you’re destitute and soon to be homeless, even a single wide trailer with heat is better than sleeping under a bridge overpass…

  • avatar
    ivyinvestor

    “Protect your ‘Chery’: Buy a Volvo” …

    Sorry – couldn’t resist.

  • avatar
    Mr. Sparky

    Ford keeps looking better by the day… Of course, being surrounded by GM and Chrysler sure helps:)

    I’m glad to see the final chunk of the Premier Automotive Group hit the rubbish bin.

    Volvo, thanks for the safety know-how. Here’s your Swedish-to-Chinese dictionary… Love, Ford!

  • avatar
    Juniper

    Chinese Govt. provides “loan” and line of credit to local auto company to buy European Brand from American Company. Where is the outrage?

  • avatar
    dilbert

    They didn’t use my money, I don’t care.

  • avatar
    wsn

    Juniper :
    March 6th, 2009 at 1:05 pm

    Chinese Govt. provides “loan” and line of credit to local auto company to buy European Brand from American Company. Where is the outrage?

    If there should be any outrage, it should have been from Chinese taxpayers.

    As for the US, the potential transaction will lower the chance that Ford will draw the taxpayer LOC.

  • avatar
    John Horner

    “China’s top economic planner has approved of Chery’s plan … “

    China’s centrally managed economy continues to grow in size and capability. Wingnuts, are you paying close attention?

  • avatar
    menno

    Well, John, it worked so well for the Russians, why shouldn’t we try it?

    Actually, China is more capitalistic now than is the Untied (?) Status. Whoops I mean United States.

  • avatar
    wsn

    John Horner :
    March 6th, 2009 at 1:44 pm

    China’s centrally managed economy continues to grow in size and capability. Wingnuts, are you paying close attention?

    These days, you will have to look further to find a non centrally managed economy. Maybe certain tribes in good old Africa still adopt free market economy.

  • avatar
    dilbert

    I love the articles on China, they come with the best ads!

  • avatar
    Robert.Walter

    Dilbert: “They didn’t use my money, I don’t care.”

    Actually, if you think Trade Defecit, and unless you have avoided buying anything bearing a Made in China label, then, sadly, they have been using your money… (besides, what do you think allows the Chinese to increase their (disclosed) military budget by 15% YOY YAY?

  • avatar
    tenmiler

    I actually really love my 08 XC70, and it’s my second Volvo in a row. I don’t know if it’s fair, but this news doesn’t make me want to make it three.

  • avatar
    wsn

    tenmiler :
    March 6th, 2009 at 6:25 pm

    I actually really love my 08 XC70, and it’s my second Volvo in a row. I don’t know if it’s fair, but this news doesn’t make me want to make it three.

    Chery is probably more focused on the new Chinese middle class who has always dream about a European brand car.

    Nothing unlike Ford selling Volvos or Jaguars to Americans.

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