The Chinese car maker Geely has
signed a deal to buy Volvo from US car giant Ford, a Volvo spokesman has said.
The size of the deal has not yet
been disclosed, but is expected to be worth around $2bn and will be finalised
in the coming weeks.
That would make it the biggest
overseas purchase by a Chinese car manufacturer.
Ford has been looking to offload
Volvo, along with other brands, since 2008 when it ran into financial
difficulties along with much of the car industry.
Ford agreed to sell Volvo to Geely
It is hoped that the sale will
allow Ford to pay off debts and allow it to focus on its core brands.
It has already sold its Jaguar and
Land Rover to India’s Tata Motors.
Analysts have also suggested that
the move will be good for Volvo, giving the brand access to the fast-growing
Chinese car market.
Last year China overtook the US as
the world’s biggest car market, with 13.6 million cars sold – a rise of nearly
50 per cent on the previous year.
By contrast, Volvo has struggled to
increase sales, and has not made a profit since 2005.
Geely is one of China’s biggest car
makers, with annual sales in China expected to total 400,000 this year.
Its international sales are tiny by
comparison, however, and the company is expected to benefit from the foothold
in the European market that Volvo will give them.
It plans to keep much of Volvo’s
operations in its native Sweden – including its headquarters and research
However some manufacturing is
expected to move to China, making Volvos for Chinese consumers.