Because of its quality and its safe car image, a lot of Belgian families make use of a Volvo as their family car. In a little while, Volvo will be undergoing a change of ownership. The question in this occasion is whether the brand will stay unaffected.
After almost a year of discussion the present-day owner, the American car manufacturer Ford Motor, and the future proprietor, Geely Holding Group, will round off the sale contract at the end of this week. The long term of consultation with the Chinese concern is due to the complex situation of Volvo. The activities of the former owner Ford and Volvo are namely strong intertwined with each other. For instance, both companies make use of the same parts for the production of their vehicles. The split up of these industrial processes isn’t that easy. Another important item within the sale contract is the independence of Volvo. The Geely Group guarantees that they will respect the image of Volvo and their obtained market position.
Furthermore was announced that Geely counted down 1.8 billion dollar for the former Swedish car constructor. Half of this enormous amount would be financed by European banks. More specifically, the European Investment bank have put between 500 and 800 million US Dollars at their proposal. Given the fact that the Volvo-factories are located in Belgium and Sweden, these countries are responsible for the state warranty of these debts. Next to that, also Swedish banks would pay up about 500 million dollar. The rest of the amount will be assisted by the Chinese banks. It’s striking that Ford Motors sells its luxury brand for only one third of the price they paid ten years ago.
The sale of Volvo to a Chinese concern has really been the ABC of quite some thinking minds. This reaction is completely comprehensible as Volvo is the first luxury brand that becomes property of an Asian company. So far, only cheaper and less luxurious cars were produced in the Far East such as Toyota, Nissan, Honda, Hyundai and Mitsubishi. I think that – with the arrival of Volvo – a change is at hand. I’m sure that the Chinese and Japanese will use the acquired know how of Volvo to bring on an evolution in their own car-industry and a better adaption to our markets. This was also the reason for the long lasting talks about the Volvo takeover. Probably Ford Motor realized that splitting the intellectual rights would involve a lot of trouble. On the other hand the takeover of Volvo opens a lot of perspectives for the car company. China and its adjacent States have a lot of potential for the former American car brand, this will probably have been the decisive element in taking over Volvo.
Sources: De Tijd: 'Ford verkoopt zondag Volvo aan Geely'
After many disappointing news articles for us, European citizins, In my opinion this is the most disappointing of them all. I'm not very happy with this deal which means the sale of a brand that has such a charisma when it comes to safety and reliability. That's why I don't believe this is just a company-to-company transfer of know how, car intelligence and so on.
BeantwoordenVerwijderenI believe we are all familiar with the past difficulties of Asian cars. One of the most important problems was the balance between small, affordable cars and the safety levels. Of course by taking over Volvo, they acquired a lot of interesting safety and endurance technology. I think this is a very important chapter in car history.
I also find it hard to accept the takeover story because an important problem will probably occur if we look at our car employment future. To me, it's clear that the production departments of Volvo will be outsourced to low income countries such as ... indeed, China.
I have a feeling that this deal, which is very promising and positive for Geely, could seriously affect our competitive position in the car industry. As another episode in the total package, Sweden loses another extremely decent car, after already having lost Saab.
On the one hand I’m a big supporter of the sale of Volvo to a Chinese concern. I think we should believe that China is a growth market. China has technology because it has a hard working population where all people believe in themselves. Moreover China has a constantly studying population.
BeantwoordenVerwijderenOn the other hand I think the takeover contains a big risk. How long will Volvo’s factory still be open in Belgium? Because let’s compare the salary costs in Belgium with those in China…
I think this deal is not bad. China is currently the best selling market for the car industry. There are even more cars sold in the first quarter of 2010 in China then in America. So, in my opinion this deal will help Volvo, it maybe will save Volvo.
BeantwoordenVerwijderenOn the other hand, there is a chance, I think, that Volvo’s imago will be harmed. The Chinese cars are known for there lower prices and because of that also a lower quality. Volvo is known for the reverse, they make good quality cars for a higher price. But when Geely Holding Group take advantage of Ford’s know how and hold on to the unique concept of Volvo, the deal will turnout very good.