Volvo Sale to Geely: Assessing the Impact on Fleet
Following its sale, Volvo Cars will remain an independently run company. All U.S.-bound Volvos will continue to be built in Europe to maintain current order-to-delivery times. The promise is to retain Volvo’s “Swedish heart.”
On March 29, Ford Motor Co. entered into a definitive agreement to sell Volvo Car Corporation and related assets to Zhejiang Geely Holding Group Company Limited. The sale is expected to close in the third quarter of 2010. The purchase price for Volvo Cars and related assets is $1.8 billion (U.S.).
Ford will continue to cooperate with Volvo Cars in several areas after the sale has been completed to ensure a smooth transition, but will not retain any ownership in the Volvo Cars business.
Following completion of the sale, Ford will continue to supply Volvo Cars with, for differing periods, powertrains, stamping, and other vehicle components.
"Zhejiang Geely would like to pay tribute to Ford's stewardship of the Volvo brand, and we look forward to continued cooperation as Volvo embarks on the next stage of its evolution with Geely," said Li Shufu, chairman of Zhejiang Geely Holding Group Company Limited.
Stephen Odell, CEO of Volvo Cars, added, "Geely has been very supportive of Volvo Cars' business plans and management team. We look forward to building a strong relationship between Volvo Cars and Geely, and to maintaining a strong relationship with Ford in those areas where we will continue to work together to ensure a smooth transition."
To learn more about how the sale of Volvo to Geely will affect fleet sales, Fleet Financials magazine interviewed Scott Doering, manager, commercial sales for Volvo Cars of North America, Inc. The following are excerpts from the interview.
FF: What has been the reaction of your fleet customers to the announcement Volvo has been sold to Geely Automobile Holdings Ltd.?
DOERING: Our fleet customers asked a lot of questions, and I think they're comfortable with the answers we've provided. Most importantly, we've made it clear that Volvo's headquarters, design, engineering, and manufacturing will remain in Scandinavia. Volvo will retain its "Swedish heart," if you will.
FF: Will your new ownership result in any changes in how Volvo goes to market in the commercial fleet marketplace?
DOERING: No, we don't expect any changes in how we go to market. Mr. Li [Geely's chairman] has been very clear that Volvo Cars will remain an independently run company. As such, Volvo Cars of North America is expected to operate similarly to the way it has. All U.S.-bound Volvos will continue to be made in plants in Sweden and Belgium, ensuring we maintain our quality levels and short lead times from order to dealer delivery. It is essentially the same type of independent structure we have enjoyed under Ford's ownership.