The once Ford owned Swedish manufacturer Volvo will soon be under the rule of the Chinese. Geely Automobile Holdings is expected to take over the struggling European company and reports today suggest it may be the right move for Volvo in the long run.
The Chinese company, which has still to finalise the deal between Ford says Volvo may potentially end losses as early as the fourth quarter this year. Geely’s parent company, China’s biggest private carmaker, has confirmed that it will pay Ford Motor Co. USD $1.8 billion (1.94 billion) for Volvo.
First three months of this year saw Geely sell around 100,000 units with expectations to finish the year with 400,000 sales. Nonetheless Geely itself suffered a decline in its second-half earnings compared to last year as some other Chinese manufacturers saw growth.
Concerning Volvo, Geely CEO Gui Sheng Yue told reporters in Hong Kong: “As far as I know, Volvo is in good operating condition and it’s possible it could break even in the fourth quarter of this year,“.
Geely is best known for producing smaller, cheaper cars so Volvo will no doubt help bring the brand back up to standards and help chase Chinese rivals that have coupled with global brands such as General Motors and Volkswagen.
In related news, the Chinese carmaker may take a controlling stake in London black cab maker Manganese Bronze, a company which Geely already owns a 20 percent stake.
China’s car market is expected to grow rapidly over the next decade. The country last year took the title as world’s biggest car market from the United States.
