Ford close to selling Volvo brand
Ford has reportedly reached an agreement with China’s Geely to sell its Volvo unit.
According to various reports both sides expect a sale of the Swedish auto brand to close in early 2010.
China’s largest private automaker, Geely, is keen on acquiring modern technology to upgrade its car line-up and bring it closer to becoming a global competitor.
General Motor’s Saab brand has already sold components of its business to China’s Beijing Automotive Industry Holdings (BAIC). That deal will not be affected by the latest announcement.
For Ford, closing the sale would provide it with cash it could use towards its goal of speeding up debt repayment as the automaker moves towards profitability it has projected for 2011.
Ford’s progress towards a sale comes as its traditional rival, General Motors moves closer to abandoning Saab, its rival Swedish car brand. Dutch luxury car builder Spyker Cars has revived talks to buy Saab this week, but it remains highly uncertain whether the two sides can reach an agreement by GM’s year-end deadline, a person familiar with those talks said on Tuesday.
Ford CEO Mulally said last week the Volvo talks with Geely were “progressing well” and Ford expected to have an announcement soon.
“We haven’t put any timetable because they are very sophisticated conversations and we want to make sure we get it right for both parties,” he said.
Ford paid $6.45bn (£4.04bn) for Volvo in 1999. The Swedish marque is fairly successful across Europe, but the brand is deemed low-value by Ford.
