Volvo will take matters into its own hands

Volvo will take matters into its own hands

July 21, 2021 0 By autotimesnews

Volvo Cars has signed an agreement with its parent company, Geely Holding, to acquire a stake in the latter in joint ventures in China with the aim of gaining full control over car factories and sales in the country.

The acquisition of an additional 50% stake in Daqing Volvo Car Manufacturing Co., Ltd and Shanghai Volvo Car Research and Development Co., Ltd will further strengthen Volvo Cars’ position in China, the world’s largest automotive market, and maximize access to one of the fastest growing regions. the world. Although the two joint ventures are already fully included in the financial statements of the Volvo Car Group, Volvo Cars’ share of their net income and equity will increase after the deal.

“With this agreement, Volvo Cars will become the first major non-Chinese carmaker to fully control its operations in China,” said Håkan Samuelsson, CEO of Volvo Cars.

Volvo Cars has grown significantly faster than the average Chinese market in recent years and will continue to invest in the country to maintain a steady growth trend. As a result of the deal, Volvo Cars will fully own the manufacturing plants in Chengdu and Daqing, the national sales company in China and the research and development center in Shanghai.

The deals will be completed in two phases, starting in 2022, when the requirement to create a joint venture for car manufacturing in China will be lifted, and are expected to formally close in 2023. The deal is now awaiting regulatory approval. Financial details were not disclosed.