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China’s Geely seals Volvo Cars takeover

Chinese carmaker Zhejiang Geely Holding sealed a US dollars 1.8-billion deal on Sunday to buy Volvo Cars as the Chinese company unleashed its global ambitions with what it called a Swedish “tiger”.

The deal ends more than a decade under the ownership of Ford Motor Co. which saw the up-market Swedish carmaker become a loss-making thorn in the side of the US giant, burdened with its own woes.

Geely chairman Li Shufu said he saw huge untapped potential for Volvo in international markets and especially in China, which has not only the biggest but also one of the fastest growing car markets in the world.

“I see China as one of the markets where Volvo can show it has the opportunity to liberate itself,” he said.

In the face of concerns that the Chinese group would slash jobs in Sweden, Geely said that it would keep Volvo Cars plants in Sweden and Belgium and was considering opening factories in China for the local market.

Geely said that it had not only secured financing for the 1.8 billion dollars (1.3 billion euros) it was paying, but was also eager to keep the struggling Swedish carmaker in operation.

It also said that the deal, which Ford initially agreed to in December, included agreements on intellectual property rights as well as supply and research and development arrangements between Volvo Cars, Geely and Ford.

The US group bought Volvo Cars, which is known for its sturdy, family-friendly cars, in 1999 for 6.4 billion dollars as part of an international push into the premium market, that eventually cost Ford dearly.

Ford Chief financial officer Lewis Booth told journalists that his company got a “fair price and “we’re very happy with the deal.” For Geely, which started out as a refrigerator parts maker, the deal marks a new chapter in its international expansion after two of its Chinese rivals failed to take over Western brands, Hummer of the United States and Saab of Sweden.

The deal had initially caused consternation among unions at Volvo Cars, which employs around 22,000 people worldwide, including 16,000 in Sweden. Unions originally opposed the deal on grounds that it was vague on expansion plans and possible layoffs amid fears Geely would not provide financing for daily operations or future investments.

But on Saturday they pronounced themselves satisfied.

In addition to preserving Volvo Cars’ factories in Sweden and Belgium, Geely said that the Swedish company would be run as a separate company with its headquarters in Gothenburg. “Volvo will be run by Volvo management, and be strategically independent. They are distinct companies. Volvo is a Swedish business with a strong Scandinavian heritage,” Li said.

AFP

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Toyota global sales up 13 percent

Crisis-hit Toyota said Monday that global sales rose 13 percent year-on-year in February, but analysts warned that the fall-out from recent mass safety recalls would continue to hang over the firm.

The Toyota group, which includes brands Daihatsu and Hino trucks, sold 613,845 vehicles worldwide last month, up from 543,435 a year earlier, a spokesman said.

The group’s global production in the same period jumped 69.2 percent to 734,631 units, of which 655,180 were for the Toyota brand alone.

Analysts said the figures were unsurprising given the auto industry’s troubles a year earlier as the world economic downturn eroded demand.

“The robust figures were largely due to a rebound from its sizeable slump a year earlier. There was no surprise. The figures were within expectations,” said Mamoru Kato, auto analyst at Tokai Tokyo Research Centre.

“It is too early to be optimistic about the fate of Toyota.” One of Japan’s most famed companies, Toyota has been battered by both the global economic downturn and by its massive safety woes over faulty accelerator and brake systems.

In recent months, the world’s largest automaker has been forced to recall more than eight million vehicles worldwide mostly due to problems with sudden acceleration, which have been blamed for 58 deaths in the United States.

AFP