Chinese Company Geely To Buy Volvo, Swedish Car Icon

The purchase of Volvo, one of Europe’s most storied brands, shows how China has emerged not just as the largest auto market by number of vehicles sold in the last year,

but also as a country determined to capture market share around the globe.

The purchase of Volvo, one of Europe’s most storied brands, shows how China has emerged not just as the largest auto market by number of vehicles sold in the last year,

but also as a country determined to capture market share around the globe.

The purchase of Volvo, one of Europe’s most storied brands, shows how China has emerged not just as the largest auto market by number of vehicles sold in the last year,

but also as a country determined to capture market share around the globe.

Zhejiang Geely said it planned to retain production of Volvo cars in Sweden, but it is expected to build another factory for them in China, most likely near Beijing or Shanghai, as noted in this story from the New York Times.

The Zhejiang Geely Holding Group, based in Hangzhou, agreed to pay $1.8 billion for Volvo, with $1.6 billion in cash and the rest in a note payable to Ford.

Ford already builds small numbers of Volvos for the Chinese market at an assembly plant in Chongqing. Most of the vehicles built at that factory are Fords and Mazdas for sale in China.

China overtook the United States in 2009 as the world’s largest auto market in terms of the number of family vehicles sold.

But the average car in China sold for $17,000 last year while the average price tag in the United States was close to $30,000, according to the consulting firm J. D. Power & Associates.

So the American car market is still bigger by value than China’s …

Many automakers in China are loaded with ambition, but Geely Auto stands out even by Chinese standards.

While making most of its money on inexpensive compacts and subcompacts, it has turned heads at auto shows with ambitious concept cars that look like Western sports cars and even Rolls-Royces.

Last fall, Ford said that Geely was the preferred bidder for Volvo, but there were a number of problems that needed to be overcome, including ones involving trade secrets, financing and the initial hostility of Swedish labor and political leaders.

In late December, the two had settled on most of the details of a deal, but financing and government approvals remained to be completed.

The parent company has said repeatedly that it planned to keep Volvo as a separate unit from Geely Auto.

The company promised again on Sunday to retain Volvo’s existing management, but according to people in the industry, the company had already hired several executives with international automotive experience to help it oversee the new subsidiary.

Zhejiang Geely is dominated by its founder, Li Shufu, the son of farmers from Taizhou, in southeastern China, who turned a small business building motorcycle parts there into one of China’s fastest-growing companies.

“I want to emphasize that Volvo is Volvo and Geely is Geely — Volvo will be run by Volvo management,” Mr. Li said on Sunday at a news conference in Goteborg, Sweden. “We are determined to preserve the distinct identity of the Volvo brand.”