American carmaker Ford recently confirmed that Volvo and its related assets are going to be sold to Zheijiang Geely. The terms of the sale have been finalized but there are still closing conditions to be met before completing the sale.
Volvo plus most of its intellectual properties were assessed to be at $1.8 billion. Ford will be paid $200 million in the form of a note and the rest of the deal will come in as cash. Ford is still expected to collaborate with Volvo in some areas of the operation to ensure that there will be a smooth transition. The carmaker will also still supply vehicle components, stampings, and powertrains for Volvo as agreed. Volvo will also still have access to the information technology of Ford and its engineering support.
Portions of the intellectual properties which were co-developed with its former parent company can be used by third parties like Geely under sublicenses. Most likely the new owner will make use of the safety technology, forced induction for the engine, and dual clutch system.
How Geely will affect the future lineup of Volvo is still uncertain. For now the brand has just revealed its 2010 XC60 and the facelifted C70 convertible. The new S60 sedan is set to be rolled out before the end of 2010.
Under the helm of the Chinese company, insiders hinted that Volvo will be launching more luxurious and bigger units in the next few years while aiming to hit a million units in sales in the next five years. The current figures show that Volvo manages to sell around 400,000 cars annually across the globe.
It might be a very ambitious goal but we should not discount that Volvo will have access to the Chinese market through Geely which can translate to 200,000 more units sold in its first year of takeover.
Geely might also move some production of Volvo in its factory in Guangdong Province.