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by Brett Davis

Ford has almost completed the sale of Volvo to China’s Zhejiang Geely Holding Co. for US$1.8 billion. The sale is expected to be finalised next week.

It’s not a matter of how much money Ford will profit from selling the Swedish company, it’s a matter of how much Ford will lose as it prepares to finalise the deal for one third of the price it originally bought the company for in 1999.

The deal is said to be part of Ford Motor Company’s plans to remove itself from all European luxury brands. Since Chief Executive Officer of Ford, Alan Mulally joined the company in 2006, his strategy has long since been selling brands like Aston Martin, Land Rover and Jaguar. Ford has reported these European brands didn’t generate the kind of sales and profits initially projected.

Although the independence presented by the sale may suggest Volvo will be releasing all-new models in the futre, Ford will continue to provide Geely with engines, transmissions and other major foundations. Ford is also reported to have offered engineering and technical support to Geely for an unknown period.




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