Carguide Blog

The deal is sealed and the last nail is in the coffin. Ford Motor Company  finally sold its Volvo brand to China’s Geely for $1.8 billion today. This deal is cheap compared to what Ford paid to buy Volvo in 1999 at $6.5 billion; no wonder Ford was reluctant and almost pulled out of the deal last week.

Volvo would be now 100 percent owned by China’s Geely, but due to the fact that most core components and technologies are shared with Ford and Volvo, Ford will continue to supply Geely’s Volvo with powertrains, stampings, and other vehicle components. And this is where Ford plans to make its $4.7 billion or more back.

“Volvo is a great brand with an excellent product lineup. This agreement provides a solid foundation for Volvo to continue to build its business under Geely’s ownership,” said Alan Mulally, Ford’s president and CEO. “At the same time, the sale of Volvo will allow us to further sharpen our focus on building the Ford brand around the world and continue to deliver on our One Ford plan serving our customers with the very best cars and trucks in the world.”

Li Shufu, chairman of Zhejiang Geely Holding Group Company Limited said: “Zhejiang Geely would like to pay tribute to Ford’s stewardship of the Volvo brand, and we look forward to continued cooperation as Volvo embarks on the next stage of its evolution with Geely.”

Volvo is the last premium brand that Ford owned in Europe. With its last sale, Ford has completed dismantling its premium car brands (Jaguar, Land Rover, Aston Martin) in the European frontier. The sale of Volvo will help Ford to focus on developing more affordable and fuel economy cars, and a few muscle cars on the side as well.