Geely Merges Volvo

2414 WordsDec 3, 201110 Pages
Introduction After a one-year long and difficult negotiation, on March28 2010, the China Geely Group went where no Chinese auto firm has gone before, buying a luxury car brand, Volvo, for $1.8billion from Ford, including the 100% shareholder and the relevant assets. It was China's largest overseas automotive industry acquisition, which was also the first wholly-owned merger. Besides, it was the first time for a Chinese own brand to merge a luxury brand. This deal proved to be a most ambitious action for the Chinese automaker’s desire to transform itself into an international auto player and wrote a new chapter for the Chinese automotive industry. The deal was greeted with cautious optimism by some experts, saying the move offered a…show more content…
In March 2009, Geely acquired DSI, an Australian gearbox maker. In addition, in order to ensure a successful bid, the acquisition team, including international investment banks, consulting firms, did adequate research and feasible analysis for the potential acquisition of Volvo matters. From Volvo’s perspective to analyze the factors Volvo’s international influences----long history and luxury brand Volvo, about a hundred year’s brand, is associated with safety and reliability, which is accepted by most people in the world. It also gives Geely a trusted brand to open the Chinese market. Geely grabbed the chance to acquire the brand name with a great reputation and 10 billion dollars of brand value. According to the research, Mercedes, BMW, Audi and Lexus occupy almost 90% of sales in China's luxury car market. However, the Chinese luxury market still has room for some other competitors to come in. And that’s why Geely merged Volvo. It is more preferable for Chinese customers and easier to help the companies expand the sales. So Volvo in China should keep her own luxury brand to satisfy the domestic customers’ needs. Volvo’s high technology Volvo is a creative company with sustainable development, with 4,000 high-quality R & D employees and engineers. Moreover, there are 2,500 global dealers across more than 100 countries, among them, 60% and 30% of the dealers are located in Europe and North America

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