Ford Sells Volvo To Chinese Group For £1.2bn
This article tells about Ford who’s selling Volvo to a Chinese group for £1.2bn. This is not the first department that they are selling, because in 2008, they sold the firm Jaguar and Land Rover to India’s Tata Motors Ltd. for $1.7bn. Ford is selling the department because it wasn’t profitable for the company. They can now focus their selves on managing its core Ford, Lincoln and Mercury brands. The only problem for Ford is that they lose a lot by selling this department: they bought it in the past for £4.3bn.
The Chinese group on the other hand is very happy with the deal because they want to stabilize and enhance the traditional markets in Europe and in North America. At the same time, they want to develop Volvo in emerging markets, including China. They also mention in this text that Geely’s chairman, Li Shufu, wants to keep manufacturing facilities in Sweden and Belgium, but they will also explore manufacturing in China.
I think this is a good investment for the Chinese group: as you can see Ford paid almost 3 times the price they’ve sold it for! With regard to the Chinese economy, this isn’t a bad investment too. On the other hand, it’s also a good deal for Ford because if they had kept this department they would only have had more problems and maybe without knowing the company could have gone bankrupt.
http://news.sky.com/skynews/Home/Business/Ford-Sells-Volvo-To-Chinese-Zhejiang-Geely-Holding-Group-Buys-Swedish-Unit-For-12bn/Article/201003415587091?f=rss
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Dear Nicolas
BeantwoordenVerwijderenAccording to me, Ford took the right decision to sell their Volvo Brand because, during the years they have bought a lot of other British brands like Aston Martin and Land Rover for example. All these brands must have high selling volumes to become profitable for Ford, which isn’t easy to realize if you own a lot of brands. Without having a less brand, companies can easily focus itself on the successful brands to make them even more profitable. The money they make from selling the one brand they invest in their other brands, they become better and everybody notices the changes, then people are more eager to buy a an Aston Martin for example.
I am convinced that Geely has made the right decision to buy Volvo because they don’t own a lot of brands like Ford. They took the opportunity to “replace” Volvo on the market and to make the brand more superior than it already is.
Good news, for the European economy is that the jobs remain for the factories in Sweden and Belgium. I was happy to read this on TheTimesOnline.com, because after the closures of Renault and Volkswagen and other car factories who were a threat trough the years in our country, the future of Volvo Belgium looks bright.
I can conclude that Geely can make the world economy better by taking over Volvo and if the brand is more successful then in the past years, Volvo cars can even be produced in China which means more profit. So jobs can remain sable worldwide. The future is in hands of Geely.
Dear Nicolas
BeantwoordenVerwijderenI have even heard this news on the radio, this is a nice deal for the Chinese investor. For Ford, this selling is a little bit less of good news, because they lose a lot of money. I have seen Volvo always as a very good and safe car and I think that when the company explores and sells their cars in China they can make more profit so they can, and hopefully will, grow a lot.
On the other hand this news also shows us the other side of the medal, because China is coming more to Europe and they are claiming a part of the world. This can also be seen as a good sign because when China is growing, maybe they will pay their employers a better salary in the future but for now, the negative part of the deal is still the cheaper goods China keeps on producing.
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