Volvo has been sold to Geely’s parent holding company for about 1/4 what Ford payed for it. Who do you think got the best deal in this transaction? How do you think this will affect the sale of Geely’s in North America? The people discussing it on the radio this morning thought that the Chinese government wouldn’t allow Gheely to export cars here until they were sure that crash tests would be much better that they apparently are now. It sure sounds like a winner for Gheely to me. $1.8 billion seems like an attractive price, especially considering the sales network for Gheely that Volvo could represent.
It gives them a ready made dealer network in North America and other countries. Agree that they have some work to do on crash safety, but Volvo is a world leader in car safety, so that would speed up the process.
Like Tata buying Jaguar and Land Rover, this might be a blessing in disguise. I’m sure Geely will be able to make Volvo profitable soon.
Some purchases make no sense. BMW bought the ailing British Leyland for 1.2 billion British Pounds. After a number of years of fruitlessly trying to make it work they sold it to local investors for a symbolic 12.00 British Pounds!! BMW kept the MINI design and made it a winner, however. The local investors could not make a go of it either.
A Chinese company now owns the assets and is going to make MG sports cars in the plant.
I agree with your thoughts on the dealer network. Just for that alone it the purchase may be worth the cost. If they choose to, they can also use this as an outlet for well-made parts. The Chinese build the Think Pad, which is still one of the most highly thought-of laptops.
In addition to the dealer network they also bought technology. That alone may have made the purchase worth it.
It’ll be interesting to watch evolve. Was the goal to sell Volvos in China or Geelys in the U.S. -------- or both?
Likely both; Geely’s deal with Chrysler to sell small cars in North America fell through, so this is their next option. There is a rapidly growing market for luxury cars in China; Buick sells more cars there than in the US. Looks like a “win win” situation!
I feel so like Mark Twain! An article in the paper on Tuesday said that the Chinese wanted a ready-made entrance to the European market.
“A Chinese company now owns the assets and is going to make MG sports cars in the plant.”
Hmmm…Do you think that these new MGs will be as reliable as the old ones?
Let’s hope not !
They can’t be any worse! The Chinese willl shop for reliable parts in Asia, and with the cost advantage of sourcing all the electrics from Asia, no more “Prince of Darkness” Lucas components. The engine will likely be a Honda or Toyota unit, like the Lotus Elise.
perhaps it’ll be just like the Miata!
Update: Yup, just like a Miata…
Well, the OK taxpayers got had from this Chinese MG thing. With great fanfare and politicians posing for the photo-ops it was announced some years ago that the Chinese were going to build MGs at the Industrial Park in Ardmore, OK.
Upon hearing this, my first thought was bunk.
So after 31 million dollars was allegedly invested (no one knows where) and millions and millions of tax incentives later absolutely zero was accomplished.
Even with a few things starting to hit the fan the powers that be were still claiming this was a done deal back in 2007. Not. The entities that were involved with this are gone; along with the taxpayers money.
Lemme guess, Boone Pickens was part of this, right?
Not that I know of, but it wouldn’t surprise me if he was as there were a number of companies, investment firms, etc. involved.
I think the only thing that got accomplished was lengthening the runway at the airport.
I can’t see how tax incentives would kick in unless the receiver started making money in Oklahoma. But I’m sure that there was a lot of money spent trying to attract the Chinese business. A surprising number of states do this. MD does not engage in it because the cost is never recouped in tax receipts, including direct and indirect employees. There can be other good reasons to attract business, but at this point. it doesn’t pay for itself.