Geely to buy volvo

Discussion in 'China' started by bengalraider, Dec 23, 2009.

  1. bengalraider

    bengalraider DFI Technocrat Stars and Ambassadors

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    @Mods please let this be an independent thread for the first three days then it can be merged with the general news thread.
     
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  3. redragon

    redragon Regular Member

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    geely is screwed, and the gov of china will have to settle the lost by using money from average joes at the end. The developed countries will never sell anything useful to china.
     
  4. Rage

    Rage DFI TEAM Stars and Ambassadors

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    Interestingly, this virulently pro-chinese website doesn't seem to think so:


    Geely's Volvo bid not 'worth it'

    By Li Fangfang (China Daily)
    Updated: 2009-08-05 07:51


    [​IMG]


    Geely Holdings Group's rumored bid to acquire Ford's luxury brand Volvo, analysts said yesterday, would not be in the best interests of the Chinese automaker.

    "I am not optimistic about Geely's chances for Volvo. Is a small Chinese company capable of paying such a big sum for Volvo?" said Zhong Shi, an independent auto analyst based in Beijing.

    Last year, Ford put a price tag of $6 billion for Volvo. Although the industry downturn has shrunk Volvo's value, analysts estimated the deal would still be worth between $1 billion and $1.5 billion at present.

    Since Ford expressed its intention to sell Volvo's assets and brand worldwide earlier this April, a number of Chinese automakers, including Geely, Chang'an, Chery, Dongfeng, Beijing Automotive Industry Holding Corp (BAIC) and Guangzhou Auto, have been likely bidders.

    "Since Ford is passing through a hard time, it won't sell Volvo at a relatively low price," said Zhong. "It's not worth it for Geely (which is on a high-speed development track in the domestic market) to pay billions of dollars for an ailing foreign auto brand."

    Geely's total assets were at just over 14 billion yuan. It earned a profit of 1 billion yuan last year. Geely's Chairman Li Shufu admitted earlier this year that the company had about 10 billion yuan in debt.

    "Although it will be a shortcut for Geely to foray into Western markets through the acquisition, the Chinese company still faces a series of big challenges," said Jia Xinguang, an auto analyst.

    "Geely has to think over the possible troubles and bottlenecks in management, localization, employment and technology. Is it capable of solving all the questions?" Jia asked.

    "Even Ford, the century-old US auto giant, could not manage Volvo profitably," added Zhong.

    Meanwhile, a Beijing-based daily newspaper reported yesterday that Geely was considering purchasing land in the capital for a possible domestic manufacturing base for the Volvo.

    "It may be a rumor again," said an auto analyst who declined to be named. "As BAIC is also a possible bidder for Volvo, the municipal government would not welcome a rival for the Beijing automaker. More important, can Geely swallow Volvo? It's a kind of Mission Impossible for Geely."

    Fu Yuwu, secretary-general of the Society of Automotive Engineers, told China Daily earlier that Chinese automakers should focus on acquiring comparatively smaller foreign enterprises.

    In March, Geely paid $56 million to purchase the Australian automatic transmission supplier Drivetrain Systems International (DSI), to boost its capability in automobile parts technologies.

    "Geely did not pay very much for DSI. And it obtained the core technology of the transmissions supplier - a technology that's needed in China's auto industry - through this smart deal," Fu said.

    "It's easier for Chinese automakers to deal with a low-profile foreign company."


    Geely's Volvo bid not 'worth it'
     
  5. redragon

    redragon Regular Member

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    I totally agree with the author, it's stupid to save western company
     
  6. mattster

    mattster Respected Member Senior Member

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    Geely....what a stupid sounding chinese name for a car company.

    If they are as dumb as their name, then they should buy Volvo.
     
  7. proud_hindustani

    proud_hindustani Regular Member

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    It would be better to establish a company that will produce automobile indigeniously like Honda, toyota of Japan and Tata of India.
     
  8. redragon

    redragon Regular Member

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    That is right, Geely is doing good in local maket, they are developing their own technology quite fast in the past several years, and China is the biggest market + biggest potential, so Geely should spend more resources thinking how to do better in Chinese market to serve Chinese
     
  9. stax

    stax Regular Member

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    Geely is a private-owned company and lack of technology. Volve's bus and car are really nice.
    I believe Geely will reduce the cost of Vovle. I think this deal will benefit bilateral.
     
  10. badguy2000

    badguy2000 Respected Member Senior Member

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    well, if Geely could buy up USA, I would not be oppose to it.
     
  11. bengalraider

    bengalraider DFI Technocrat Stars and Ambassadors

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    I for one would buy a chinese manufactured XC90 if they manage to keep the technology and quality intact,the lower labor costs should bring down the price by a third at least.
     
  12. Known_Unknown

    Known_Unknown Devil's Advocate Stars and Ambassadors

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    I wouldn't. Geely is majority owned by the Chinese government. I wouldn't want my money going to the CCP.

    However, it seems that the Chinese have finally woken up and are following in the footsteps of Indian corporations.
     
  13. stax

    stax Regular Member

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    Totally wrong! Geely is a private-own Company!
     
  14. badguy2000

    badguy2000 Respected Member Senior Member

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    Geely is completey owned by private capital. it is a pure private company
     
  15. stax

    stax Regular Member

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    Geely already make cars indigeniously, and most important it's a private-owned company, unlike other state-owned companies! Geely is the hope of China motor industry!
     

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