Geely is hoping to break even on this deal by 2011, China’s Zhejiang Geely Holdings is projecting to produce up to 300,000 Volvo cars a year at a new factory in Beijing, according to sources.
documents submitted to regulators by Geely reports that Zhejiang Geely, parent of Hong Kong-listed Geely Automobile, will complete the purchase of Ford Motor Co.’s Volvo unit for up to $2 billion by May. If they this much capacity it would double Geely’s annual output, that reached 321,900 units in 2009 for the entire group, up 45% from a year earlier. They are targeting that by 2015, it will be able to perform sales of 2 million cars a year. Analysts say that Geely’s plan to break even next year as being highly optimistic at most. Geely has to build a plant first and Chinese buyers might need some time to accept a Volvo that’s made in China. Zeng it will take some time for them to break even.
Ford is expected to sign a deal by early 2010 with Geely, which will buy Volvo’s operations for about $2 billion. Geely isn’t planning on making too many changes to Volvo’s current development, production, or dealership operations when the sale is finalized, It’s
In recent years, Ford has sold Aston Martin, Jaguar, and Land Rover which helped them to return to profitability. Volvo was the most difficult to off load. The problem in the Volvo sale has been the intellectual property rights associated with so many Ford products use a common platform with Volvo products. Li Shufu, the founder and chairman of Zhejiang Geely Holding Group, the parent company of Geely, said that he looks forward to putting Volvo in the company. Geely is hoping they could help Volvo expand in the Chinese market as well as reduce production costs.
