In an informal decision, the Chinese Geely Holding group has accepted to take over the car unit from Volvo of Ford. Once materializes, this will be the biggest global deal in the automobile industry. The deal, almost to be certain, is the outcome of two years’ prolonged discussion with two companies. The Chinese company would make the global impact for which it has been toiling for.
Ford will sure to benefit out of this deal financially, that it can now focus more on its brands. Ford chose the core company of Geely Automobile Holdings(0175.HK) as the most reliable company to close the deal. Ford has been receiving the dead end loss out of this Swedish brand and Geely will concentrate on the brand and operations in Sweden.
In the meantime the Chairman of Geely had a plan to set up a factory to accommodate 300000 Volvo cars making or the equivalent of the Chinese market needs. In 2009 China pushed the US behind in the tussle over the top class auto making country. The net sale hiked to 13.5million units @46%. With the lack of technology the Chinese car makers are exploring the entry to the Western markets. This deal with Ford comes as a timely gesture for Geely to get recognized in the global market.