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Ford sells Volvo to Chinese carmaker Geely

30/03/2010

Swedish carmaker Volvo is being sold to Chinese firm Geely for $1.8 million (US), it has been announced.

The marque's current owners, Ford, said that the deal would be concluded in the third quarter of this year and that the final price paid would be adjusted in relation to pension deficits, debt, cash and working capital.

Negotiations surrounding the sale have been underway for some time, with Ford declaring in October 2009 that Geely was its preferred bidder for the brand.

Announcing the agreement at a press conference on Sunday, Ford's chief financial officer Lewis Booth described the sale as "a very significant day for Ford, for Geely, but particularly for Volvo".

Booth added that Ford's priorities for the sale had centred around finding a new owner that would cherish Volvo's "unique Swedish brand values".

Stephen Odell, Volvo president and CEO, thanked Ford for its support of the Volvo marque during its 11-year ownership.

The American giant bought the firm in 1999, running it alongside other prestige marques as part of its Premier Automotive Group - of which Volvo was the last remaining member. Others that have already been sold off included historic British firms Aston Martin, Jaguar and Land Rover.

Geely, founded as a fridge maker in 1986, only began the production of cars in 1998. It plans to maintain Volvo's Gothenburg headquarters and Swedish and Belgian manufacturing plants, but it will also begin making Volvos in China.

It is thought that owning the brand will also provide the comparatively young carmaker with engineering expertise and skills. Geely has previously attracted criticism for cars that appear heavily influenced by existing models, such as the GE - which is considered by many to resemble the Rolls Royce Phantom.

Geely chairman Mr Li Shufu said that the sale agreement was a milestone both for Geely and Volvo, and promised that his company would "safeguard and strengthen Volvo's renowned brand heritage".

"Volvo cars are rightly famous for their durability. Each model has proved a testament to safety, quality, environmental care and Scandinavian design," he added.

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