Ford Motors is all set to trim down with Volvo brand going to Chinese conglomerate for $1.8 billion. The deal marks the culmination of long standing negotiations cialis price between Ford and Geely Investment Holdings and brings to the fore the Chinese manufacturer in the global automotive industry.

Geely is China’s 12 th largest automotive maker and has expressed intent to continue producing Volvo in Sweden. It is also looking to achieve economies of scale by setting up a production facility for Volvo in China.

Since Ford took over Volvo for $6 billion in 1999, Ford has not been able to capitalize on Volvo’s strength as a brand. The fact that Ford had been looking for a buyer for long is also a testimony to the fact that Ford did not consider Volvo’s acquisition of benefit.

On its part, Ford has maintained that the sale is a part of its consolidation strategy and to focus on core products. Given the fact that

Ford has been doing well across the world in recent years, and Alan Mullally has been successful in turning the brand around, Ford’s new found confidence in its core product base is a welcome sign of company’s overall confidence and vision for products like Ford Fiesta and Fusion.

You may do well to remember that Ford had sold Jaguar brand to Indian manufacturer, Tata Motors in 2009 for $2.3 billion. That move was again a result of consolidation exercise. Both, Viagra Jelly Jaguar and Volvo are premium and luxury brands that do well in Europe.

Last year has seen General Motors and Ford exiting out of premium brands of Europe. So, first it was Jaguar and then it was Saab, followed by Volvo.

Many people have raised questions on how well Geely can integrate a premium brand like Volvo in its own product range. Geely has already stated that it will retain the 2 production units in Sweden and 1 in Belgium, besides opening another facility somewhere near Beijing or Shanghai. It has also confirmed that it will run the business through a separate legal entity, with the top management coming from Geely and running the show from Gothenburg.

The actual deal should get through in the 3rd quarter of this year, once both companies have complied with respective regulatory compliance requirements. And, while the deal should establish or at least push Geely Investment Holdings to the front state of automotive industry, it remains to be seen how Geely will be looking to finance this deal and ensure that Volvo’s committed market share remains sustained.

There are plenty of pertinent questions on the deal and most of these do not have a clear cialis professional tadalafil answer at this point. Eventually, time will tell if this potential acquisition will succeed the test of Chinese regulatory authorities, who are supposedly going to decide whether Volvo comes in or not. Analysts will remember the failed takeover of Hummer by a Chinese manufacturer when the Chinese Commerce Ministry refused to clear the deal between General Motors and Sichuan Tengzhong Heavy Industrial Machinery.

For now, Ford has done what it could to streamline its product range.

Author Bio: Ian is an automotive analyst who tracks automotive happenings across the world.

He suggests using Red Fuel Cards for European fleet managers. You can check out the Red Fuel Card on www.businessfuelcards.co.uk.

Category: Automotive
Keywords: volvo geely, volvo ford