Volvo Sold To China

Bertel Schmitt
by Bertel Schmitt

As predicted various times on TTAC, Volvo has finally been sold to China. Ford said in a statement that it had agreed to all substantial commercial terms in a deal to sell Volvo to China’s Geely Holding Group, parent of Geely Auto, Reuters has on the wire.

“While some work still remains to be completed before signing, Ford and Geely anticipate that a definitive sale agreement will be signed in the first quarter of 2010,” Ford said. Final closing on the deal is expected for Q2 of 2010.

Volvo changes hands for an estimated $1.8b. This makes it by far the largest overseas acquisition by a Chinese automaker. Ford is getting a nice chunk of money for its cash hemorrhaging Volvo unit, they are selling Volvo whole, not piecemeal as in Saab and GM.

Supposedly, the Chinese symbol for “crisis” is the same as for “opportunity,” although some people debate that. Whatever it may be, China is making the best out of the crisis. Its car market is exploding at sometimes triple digit rates. China has long surpassed the US as the world’s largest auto market, and is expected to close out the year with more than 13m vehicles sold. With Chinese patience and bargaining skills, they are buying unloved assets on the cheap. The target: Close the technology gap, and be a viable player in the export market. They’ll get there. A country that can put people in space, a country that can finish an 800mile high speed rail link (80 percent on bridges) between Beijing and Shanghai within 4 years (New York’s 8 mile AirTrain took a year longer to build, and it ends in Jamaica,) that country will eventually be able to build cars that are not a laughing matter.

Volvo is a big step in that direction. With Volvo, Geely buys a brand that stands for safety, and most of all, they are buying a series of homologated and internationally certified cars. At a lower price point, Volvo could just be the key to open China’s car exports.

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.

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  • Kamiller42 Kamiller42 on Dec 28, 2009

    You're making the right moves Ford. Now, close Mercury. It's not needed, and it's devaluing your Lincoln dealerships. Lastly, reconsider just how apart you want to be from Mazda. Don't let success make you cocky.

  • Euphoria Euphoria on Jan 09, 2010

    Most of the West forgot when Japanese cars were disliked and discriminated for copy cats and made in the East. The American cars lost their grounds, too heavy, too big and too much gas consuming. After many years, Japanese has won their ability, quality, safety and good pricing. Toyota indeed was one of the 1st to get this reputation. Than Honda won their reputation on F1 races. Volkwagen bought SEAT and not many people bought the Spanish version of VW. But have a look now how SEAT is doing? VW bought Skoda. Who wanted to drive in a East European Volkwagen? Yes! Now a days many drive Skodas. Even in Germany Autobahn these Skoda's are very popular. Porsche? It's Volkwagen now! Jaguar? It's Tata now. Volvo? Chinese owns them, so what? Look in your house and look where they are made? and how many products you own is made in China! Don't be a Hypocrite ! Give the Chinese to catch up, what they lost during Mao's time. If Volvo China is going to offer their new collection with 5 year Full Warranty, I will be the 1st to buy and change it every 5 years, just like leasing a car. It's about service and mobility Not Envy and Jealousy! "Volvo for Life" that's their logo.

  • Stephen My "mid-level" limited edition Tonino Lambo Ferraccio Junior watch has performed flawlessly with attractive understated style for nearly 20 years. Their cars are not so much to my taste-- my Acura NSX is just fine. Not sure why you have such condescension towards these excellent timepieces. They are attractive without unnecessary flamboyance, keep perfect time and are extremely reliable. They are also very reasonably priced.
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  • ToolGuy Not sure if I've ever said this, or if you were listening:• Learn to drive, people.Also, learn which vehicles to take home with you and which ones to walk away from. You are an adult now, think for yourself. (Those ads are lying to you. Your friendly neighborhood automotive dealer, also lying to you. Politicians? Lying to you. Oh yeah, learn how to vote lol.)Addendum for the weak-minded who think I am advocating some 'driver training' program: Learning is not something you do in school once for all time. Learning how to drive is not something that someone does for you. It is a continuous process driven by YOU. Learn how to learn how to drive, and learn to drive. Keep on learning how to drive. (You -- over there -- especially you, you kind of suck at driving. LOL.)Example: Do you know where your tires are? When you are 4 hours into a 6 hour interstate journey and change lanes, do you run over the raised center line retroreflective bumpers, or do you steer between them?
  • Mike Bradley Advertising, movies and TV, manufacturing, and car culture have all made speeding and crashing the ultimate tests of manhood. Throw in the political craziness and you've got a perfect soup of destruction and costs.
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