Volvo goes East as Ford completes deal with Geely

The negotiations had been stretching over months but now the sell-off of Volvo has been finalized between the US-American Ford Motor Company and the Chinese Zhejiang Geely Holding Group Company Limited. The deal is worth about $1.8 billion, the exact figure will be released later this year.

Alan Mulally, Ford's president and CEO, described Ford’s motives for the sale of Volvo as: “The sale of Volvo will allow us to sharpen our focus on the Ford brand around the world and continue to deliver on our One Ford plan serving our customers with the very best cars and trucks in the world."

The deal stipulates that Fords will continue to cooperate with Volvo, while not retaining any assets in the company. Hence, Ford remains as supplyer of Volvo’s vehicle components, ranging from powertrains to stamping systems. The companies have also found an agreement on intellectual property rights as Volvo will sub-license specific systems to Geely to enable technology-transfer.

New President and Chief Executive of Volvo Cars will be Stefan Jacoby, previously at Volkswagen America, and the company’s headquaters will remain at its manufacturing plants in Sweden and Belgium. According to the agreement, Volvo’s management will have the autonomy to execute on its business plan under the strategic direction of the board.

The parting CEO of Volvo Car Corporation, Stephen Odell, is positive about the company’s future with Geely:“Volvo is well positioned for the future with an exciting range of products that remain true to its core values – safety, quality, environmental responsibility and modern Scandinavian design."