So What About Geely And Volvo?

Bertel Schmitt
by Bertel Schmitt

While bumbling GM so far hasn’t closed any of their cast-off brands deals, Ford’s Volvo sale to Geely appears to progress quietly, but steadily. The usually well informed and reliable China Car Times says that Geely is “feeling secure about the Volvo purchase.”

Ford has enlisted JP Morgan and Citigroup to assist with the sale, Geely has employed Rothschild. The deal is expected to close soon, “before the start of 2010.”

According to CCT, Geely is working off a seven point checklist:

1. Geely has secured loans and funding from the Bank of China to initiate a buyout of Volvo.

2. Geely plans to keep Volvo as an independent company, rather than merging it into Geely.

3. Volvo may buy parts from China.

4. Volvo keeps its current sales network already set up in China.

5. Volvo keeps its current production setup, and its R&D ability.

6. Volvo keeps its current contract with workers.

7. Volvo keeps its international dealer network.

That, and Geely’s plans to more than double Volvo’s world-wide sales should make everybody happy and keep other bidders at bay.

Bertel Schmitt
Bertel Schmitt

Bertel Schmitt comes back to journalism after taking a 35 year break in advertising and marketing. He ran and owned advertising agencies in Duesseldorf, Germany, and New York City. Volkswagen A.G. was Bertel's most important corporate account. Schmitt's advertising and marketing career touched many corners of the industry with a special focus on automotive products and services. Since 2004, he lives in Japan and China with his wife <a href=""> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href=""> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.

More by Bertel Schmitt

Join the conversation
  • Stingray Stingray on Nov 26, 2009

    Ford should stop this sell for some time and gather some of the fruits of the new models.

    • See 1 previous
    • Rnc Rnc on Nov 26, 2009

      Lets see Geely will make volvo a resounding success, just as Volvo itself as well as Ford couldn't, those chinese manufacturers have such a strong history of this??? The twin turbo is currently 20% of all the new taurus being sold, seems to be doing pretty well to me. The dreamliner, ahead of schedule and under budget when AM left. And what he has to do with Volvo other than getting there after the fact and doing exactly what he said he would do (focus on Ford and sell the other brands).

  • Forty2 Forty2 on Nov 26, 2009

    Oh! So there's still hope for a resurrected 240 for the Chinese domestic market! OK, maybe not... but a tough, stout car like that would be perfect for the non-urban areas.

  • Tosh Tosh on Nov 26, 2009

    "3. Volvo may buy parts from China." "May," as in "is permitted to" or as in "might" or as in "will"? As in "will buy ALL parts from China"? I don't see this working so well anywhere where Volvo has any traditional customers expecting a certain overall manufacturing competency. And isn't it generally the labor costs which make European cars relatively expensive, so what's changing? Seems naive to pretend Geely doesn't want Volvo staff and facilities just long enough to show them the ropes (as Ford did), and then start building all-Chinese "Volvos."