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Volvo news — Volvo sold to Chinese - 2010
You’re probably not wearing a stitch of
clothing that wasn’t made in China. Same goes for your mobile and computer, too.
So we shouldn’t be at all surprised that a Chinese company today bought one of
the most established car firms, Volvo.
Geely, among China’s fastest growing
domestic car makers, has agreed to pay $1.8 billion (£1.2bn) for Volvo from
Ford. So Ford has taken a bit of a hit - this is only a quarter of the money
Ford paid for Volvo 11 years ago.
However enterprising Geely is, it’s hardly
in Volvo’s league for car engineering, quality and safety. To rebut the fear
that the Swedish cars will be watered down, Geely has said that Volvo will be
run as a separate company with separate day-to-day management. And for the time
being it will continue to buy engines and technologies from Ford.
But in order for Volvo to get the economies
of scale it will need outside the Ford empire, in a few years’ time some Volvos
will be built in China to serve the rapidly growing market there.
In those 11 years of ownership, Ford never
really managed to make money from Volvo. Remember, it also owned Jaguar, Land
Rover and Aston Martin, and has sold the lot of them now. Ford’s upmarket
multi-brand strategy is history.
Instead Ford wants to concentrate all its
efforts on the blue-oval cars. It seems to be working, too. Ford is making
better cars than ever. Its image, especially in the US, is stronger than it has
been for years. And it’s actually turning a profit all around the world.
Paul Horrell, Consultant Editor of Top Gear magazine