After meeting all of Ford‘s sale terms, it looks like Chinese car company Geely will be purchasing Volvo from the Blue Oval next year. While some work still remains to be completed before signing – including final documentation, financing and government approvals – Ford and Geely anticipate that a definitive sale agreement will be signed in the first quarter of 2010, with closing of the sale likely to occur in the second quarter 2010, subject to appropriate regulatory approvals. The prospective sale would ensure Volvo has the resources, including the capital investment, necessary to further strengthen the business and build its global franchise, while enabling Ford to continue to focus on and implement its core ONE Ford strategy. While Ford would continue to cooperate with Volvo Cars in several areas after a possible sale, the company does not intend to retain a shareholding in the business post-sale. Now although I’m not a fan of Geely, it’s good to see that the future of this Scandinavian-rooted company – unlike SAAB – seems secure.
Based on what I currently know ( unless there has been recent developments I have not read about yet ) The potential sale of Volvo to Geely will depend if Ford is willing to allow Geely to use Ford platforms and establish a partnership/alliance between Ford and Geely for a period of time. without this, Volvo’s will become simple badge engineered versions of Geelys after the sale! An article about this stated ‘Ford specified that all substantive
commercial terms have reached agreement, and now only the details are left to be worked out.’ There is speculation that these details to be worked out include the issue of Geely using Ford platforms and establishing some kind of Ford-Geely partnership/alliance for a period of time. If Ford does establish a partnership with Geely allowing them to use Ford platforms, will we see Geely versions (or Maple, an other Chinese car owned by Geely) of the Ford Taurus, Mondeo, Fusion, Focus, driving down the highway, for example? Jaguar and landrover were only slightly integrated into the rest of Ford. Volvo is completely integrated into Ford just as much as Saab is integrated into GM. Tata and Ford still needed to establish a low level partnership for the transfer of brand ownership over to Tata. Ford will need to establish a much more deeper and longer lasting partnership/alliance with Geely to be able to allow this sale to proceed without damaging the Volvo brand!! One person commented on an other related article that Ford also needs Geely as well to increase it’s market share in China. That might be true. However, that does not change the fact that Geely will require access to Ford’s platforms and a partnership with Ford for a period of time to avoid damaging the Volvo brand wich might happen if Geely is forced to simply build Geely cars with the Volvo badge after the sale is completed. Maybe we are now one step closer to a Geely Taurus, a Geely Focus, a Geely Mondeo, a Geely Fiesta, and a Geely Fusion and maybe even a Geely Mustang driving on American roads and highways. Is Ford ready to accept this??