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.
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Swedish car manufacturer Volvo needs help and is looking at the Belgian government for extra funding. Volvo operates a factory in the region of Flanders in Belgium and Kris Peeters, the Flemish Premier, is discussing with Stephen Odell, 
CEO of Volvo, a possible loan amounting to $418 million.
The talks are expected to be done by this week before the elections in the region. If the loan will push through, experts are assuming restrictions on where the cash can be used. The loan guarantee is aimed at helping specifically the plant in Flanders.
The primary concern of the Flemish government is to preserve the employment of the workers. The business plan presented by Volvo will be studied under this light plus the possibilities of Volvo being acquired by other parties. The Premier will only agree to the loan if he can get long term commitments from Volvo and understand its long term plans.
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As we have read in the previous reports, Ford initially denied Volvo’s sale, however, it has been confirmed that Chinese automaker Geely is Volvo’s official buyer, outbidding the fellow Chinese car companies like the Beijing Auto, Chongqing Changan Automobile Co., and Dongfeng Motor Group, and even the European constellation.
According the Shenzhen News in China, unnamed yet reliable sources inside the Chinese government have leaked that Geely has written and signed the purchase letter for Volvo. Geely and Ford are still going over the final details of the purchase, emphasizing on the turnover of the technology, the brand’s existing marketing strategies and positioning, layoffs, and Geely’s plan to kick off Volvo’s production in a brand new factory in Guangdong Province.
According to the ongoing deal, the first Chinese Volvo’s full design will be designed solely by Geely—the new-generation XC90to come out in 2011. Moreover, Geely will invest almost $10 billion to help build and strength the brand.
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Ford is looking to sell the Swedish brand Volvo which it acquired in 1999. The tag is at $6 billion which is close to how much Volvo was acquired. Ford is using the expert advice of JPMorgan Chase & Co.
The move is considered by Ford amid the weakening of the auto industry and global economy. The company is looking to boost its finances for operations and aims to partake in the $9 billion aid from the US government.
Volvo was considered the top caliber vehicle for safety last January of 2008. Ford is counting on the confidence of the market on the Volvo brand to attract bidders.
Any heavy discount will be favorable to the buyer but will not be ideal for Ford. The choices may also be among Chinese car producers, business groups arranged by the Swedish government, or by buy out companies.
The Renault group of France has clearly stated that they are not interested in Volvo. Same is true for Korea based Hyundai.
SAIC from China declined to comment but are seen by experts as a potential bidder. Another buyer from the Far East is the Dong Feng Motor Group.
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