Although last week’s reports out of Sweden and Dearborn, Michigan, indicated that Ford and Geely were struggling to come to terms over the proposed sale of Volvo , a report today suggests that things are moving more smoothly towards the sale.
The Chinese automaker will reportedly pay $1.8 billion for Volvo by a February 8 target date, sources told China’s Economic Observer. That’s far less than the nearly $6.5 billion Ford paid for Volvo when it acquired the brand in 1999, and it’s a move that has left some analysts scratching their heads given the high level of technology Volvo has provided for Ford.
China’s National Development and Reform Commission has told local media that it approves of the purchase and representatives from the government are set to visit Sweden to help move the sale forward.
Geely is also likely to start assembling Volvo vehicles in China – presumably for consumption in the automaker’s new Asian market. The Beijing-area plant would probably begin building Volvo’s XC60 crossover to compete with the popular Audi Q5 and BMW X3 . Currently, Volvo cars are built under license in China by Chang’an Ford Mazda , a partnership that dates back several years to when Ford had a major share in Mazda. Chang’an Ford Mazda will keep building S40 and long-wheelbase versions of the S80 for at least another 4-6 years.
