Geely-Volvo deal a new chapter for Chinese companies
- Source: Xinhua
- [18:02 March 30 2010]
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Chinese automaker Geely has finally married Sweden's iconic Volvo brand with a wedding gift valued at $1.8 billion.
The long-awaited acquisition, which Geely and Volvo's parent company Ford both aim to close in the third quarter, is the first successful purchase of a high-end global brand by a private Chinese car manufacturer.
Although questions remain on whether and how the 24-year-old Geely would swallow the 84-year-old Volvo, the takeover offers a bright future to both buyer and seller. The deal will write a new chapter for Chinese enterprises to go global.
It is a win-win wedding in terms of the world auto industry. China overtook the United States to become the world's biggest car market last year as sales saw a 46-percent growth to reach 13.6 million units despite the global recession.
The deal offers great opportunities for both Geely and Volvo. That's because the former aims to let Geely cars go to the whole world and the latter has started to target Chinese customers.
Since the Chinese government initiated a "go-out" policy in 2002, China have been making many attempts to break through. But China's industry lacked technology and brand recognition.
Geely's deal came after two other Chinese companies failed to buy two Western brands - General Motors's Hummer and Saab units. The ambitious Geely, starting business as a refrigerator parts supplier, this time has won support from the Chinese government for a domestic brand.
