Zhejiang Geely Holding Group, the parent of China's Geely Automobile Holdings, provided an update on its plan to purchase Ford Motor Co.'s Volvo unit. Company chairman Li Shufu asserted that while it has yet to sign an agreement, its plan remains on track.
Previously, Geely had announced its expectation for the deal to be reached last month but until today, no official agreement had been signed yet.
Li revealed this information during the opening of the National People's Congress in Beijing last Friday. He gave assurances that things are moving as planned.
Reuters reported that a document indicates that Geely, China's largest privately owned carmaker, has a target to complete the purchase of Volvo for up to $2 billion by May.
In addition, Geely reportedly aims to nearly double Volvo's annual global production with a new factory in Beijing. And this would eventually lead to a profit by 2011. Li declined to give details but he confirmed that Geely had obtained some of the regulatory approvals it needed to finalize the deal.
Getting the approvals is definitely crucial. Last month, Sichuan Tengzhong Heavy Industrial Machinery Co. withdrew its bid for General Motors Co.'s Hummer brand because it had failed to receive clearance from Chinese regulators within the proposed timeframe.