As soon as Zhejiang Geely Holding Group seals the deal to purchase Ford Motor Co.’s Volvo unit, the Audi A6’s standing as Chinese state officials’ car of choice could be threatened. Li Shufu, the head of Geely, hopes to successfully acquire Volvo for up to $2 billion.

Li, 47 years old, has been compared to Henry Ford because of his ambition to create a mass manufacturer of affordable cars. Already, Li is planning a factory in Beijing that can produce the same number of Volvos in China as in foreign countries. John Zeng, an analyst with IHS Global Insight, an industry consultancy, said that Li Shufu bet huge and the stakes are “extremely high.” However, Zeng thinks that he could win since he can rely on the China market to turn Volvo around. Last year, China replaced the United States as the top auto market. In fact, China is now a key source of business for global carmakers as well as domestic newbies, which are looking for global acquisitions in order to get ahead. However, Chinese carmakers are likely to have a tougher time than the Japanese and Korean companies despite an expanding home market and a supportive government to take domestic cars to the global market.

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Tags:car news, Volvo, volvo chinese state official car, volvo deal
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Ford Motor Co. expects that in the first quarter of 2010, it will be signing an agreement to sell its Volvo car unit to China’s Zhejiang Geely Holding Group. By the second quarter, Ford expects to already have closed the deal.

Ford stated that all of the commercial terms under the deal have been settled but before its completion, Geely will have to secure financing and get approvals from the Chinese government. In a statement, Ford asserted that the upcoming sale would ensure that Volvo has the resources and the capital investment required to strengthen further the business and build the global franchise, while “enabling Ford to continue to focus on and implement its core ONE Ford strategy.” Ford would benefit from closing the sale because it would then have the cash to use to help achieve CEO Alan Mulally’s goal of hastening debt repayment as the company moves toward profitability it has projected for 2011. Ford last posted an annual profit in 2005 however, it is the only US automaker to have avoided bankruptcy and a US government bailout due to the $27 billion borrowing program it completed before the decline for the US auto market that began in 2008.

Tags:car news, Volvo, volvo deal, volvo sale completed
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Zhejiang Geely Holding Group’s status as the preferred bidder for Ford’s Volvo unit may be on shaky ground as Crown consortium, a group led by former Ford Motor Co. executives, has submitted a revised bid this week, according to the Wall Street Journal which cited people familiar with the situation.

Crown consortium is fronted by former Ford director Michael Dingman and former Ford and Chrysler LLC executive Shamel Rushwin. The report said that while Crown has largely been considered as an underdog in the competition to acquire Volvo, Ford has been encouraging it and seeing if it can come up with the funding. The Wall Street Journal added that sources did not say how much Crown’s bid was but they described it to be on par with the Geely offer. We could only speculate how close Crown’s bid is to Geely’s, which was chosen as the preferred bidder with a $1.8 billion bid.

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Tags:car news, us consortium volvo bid, volvo bod, volvo deal
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At least three major Chinese banks have Geely’s back as it pursues its bid for Ford Motor Co.’s Volvo unit. Geely has already been named the preferred bidder but for the agreement to proceed, Ford had asked about Geely’s financing plans.

Sources say that banking sources are the least of Geely’s problems as so far, Bank of China, China Construction Bank and Export-Import Bank of China had agreed to extend loans to Zhejiang Geely Holding Group. Export-Import Bank of China is a policy lender wholly owned by the Chinese government and directly led by the cabinet. Continued after the jump!

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Tags:car news, geely, geely loan, geely volvo loan, volvo deal, volvo sale
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A major obstacle has just been removed from the deal brewing between Zhejiang Geely Holding Group and Ford Motor Co. According to a Europe-based Geely spokesman, the deal has been held up due to a dispute on intellectual property rights issues in the bid for Volvo.

The spokesman also confirmed that if the sale is made, Geely will take control of all technologies developed exclusively by Volvo. Under the agreement, Volvo will still have access to Ford technologies that are essential to the future development of the brand, including those relating to safety and environmental protection. On the other hand, Geely will not have access or any ownership rights to those Ford technologies. Just last month, Ford named Zhejiang Geely Holding Group, the parent of Geely Automobile Holdings, as a preferred bidder for its money-losing Swedish car unit.

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Tags:car news, geely volvo deal, Volvo, volvo deal, volvo intellectual property rights
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Zhejiang Geely Holding Group, the parent of Geely Automobile, will face tough competition from a US consortium called Crown, which is set to make a bid for Volvo next week, the Dagens Industri daily reports. Crown represents a group of Swedish investors led by Michael Dingman, a former Ford Motor Co. director. Last December, Ford had put its Volvo unit up for sale.

Last month, Ford named Geely to be its preferred bidder. Media reports put Crown’s bid at between $2 billion and $2.5 billion. A Crown consortium source has said that there’s no point in bidding low since nothing will be won that way. Dingman served on Ford’s board from 1981 to 2002 before he retired.

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Tags:car news, us consortium volvo bid, Volvo, volvo deal, volvo news, volvo sale
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Negotiations participated in by representatives associated with China’s Zhejiang Geely Holding Group’s impending purchase of Volvo are off to a good start. Zhejiang Geely has informed unions that it intends to keep Volvo production in Europe. Last Thursday, union leaders at the Ford Motor Co. unit held their first talks with Geely. Continued after the jump!

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Things are looking even better for Zhejiang Geely Holding Group, the parent of Geely Automobile, to be given the right to acquire Ford Motor Co.’s Volvo car brand. Members of Geely’s management team are in Sweden this week to discuss their bid, according to a Europe-based spokesman for Geely.

Zhejiang was named last week by Ford as being the preferred bidder. The meeting will take place in Gothenburg and Stockholm this week and will be attended by Ford and Volvo officials, Volvo unions and Swedish government officials. Among the issues that would have to resolved is the transfer of Volvo’s intellectual property rights. A Ford spokesman said that the company remains confident in its ability to protect its secrets because it overcame similar issues during the 2008 sale of Jaguar and Land Rover to Tata Motors Ltd. An insider source had said that Ford’s decision to name Geely as a preferred bidder indicates that considerable progress has been made at this point.

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Tags:car news, geely, geely volvo sale, Volvo, volvo deal
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The bid made by Zhejiang Geely Holding Group, the parent of Geely Automobile Holdings, for Ford Motor Co.’s Volvo car unit is in the final stretches of getting approved. One of the issues recently resolved is related to the rights. Yuan Xiaolin, a Geely spokesman, had said that Volvo will retain the rights for its licensed technologies and that Chinese bidder Geely will gain the right to use the technologies. Continued after the jump!

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Tags:car news, Volvo, volvo deal, volvo sale news, volvo technologies
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