Volvo could be sold to China on Sunday

Strong rumors that Volvo sale is now only a few days away.

The sale of Volvo Cars from Ford to Geely from China had ended – and lately there have also been several conflicting messages about where the agreement between the two parties sat.

But now it appears that all issues are cleared from the road and that it is only talking about a few days before the agreement is signed.

Skeptical Swedes

Financial Times refers to three sources close to the agreement that states that the agreement is to be signed before the Passover, probably this coming Sunday. Thus, it appears that the long and tough negotiations has yielded results.

Ford and Geely have been working on this for about a year, after Ford went out and declared that they no longer wanted to own Volvo.

Internally, there has been skepticism about this acquisition at Volvo. However, Geely has several times emphasized that their plan is to give the Swedes a high degree of “autonomy” – and that Volvo will live on as an independent brand, with the focus on cultivating the brand further.

Factory in China

The Chinese also have very ambitious plans for production. The objective should be to double Volvo sales. To do that Volvo needs a new factory in China, with capacity of 300,000 cars annually. This will initially supply the Chinese market with cars, but exports will also be expected. Here the cost is far below the factories Volvo has today in Sweden and Belgium.

Strength jobs

It may also be necessary to move the cars approaching the end of the lifecycle to China. When all the development costs are taken, this may be good business for the “home market”, even though prices may be lower than internationally.

Geely will also have to put forward plans for significant new investments in Sweden. This is to make vehicle production more efficient and rational, and thereby strengthen the Swedish workplaces. This is particularly important in relation to collaborative climate to come.

Source : TV2

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