Volvo to buy out Geely's stake in China, manufacture and sell cars on its own1 min read . Updated: 21 Jul 2021, 01:51 PM IST
Chinese car manufacturer Geely Holding Group was already manufacturing its own cars before it acquired Volvo Cars from Ford Motor in 2010.
Volvo Cars is all set to come out of its Chinese parent company Geely Holding Group's shadow in the world's largest car market soon. The Swedish car manufacturer, which has been in tie up with the Chinese carmaker for more than a decade now, has decided to buy out its stake and go alone.
In a statement issued by Volvo Cars on Wednesday, the Swedish carmaker said that it has signed an agreement with its parent company Geely Holding to buy out from their joint ventures in China. Volvo now aims to take full ownership of its facilities in China, manufacturing of its vehicles and sales in the Chinese market.
The details of the agreement has not been shared by the Swedish carmaker or Geely yet. However, the deal will allow Volvo Cars to have full ownership of its plants in Chengdu and Daqing, along with the research and development facility in Shanghai.
"With this agreement, Volvo Cars will become the first major non-Chinese automaker with full control over its Chinese operations," Hakan Samuelsson, CEO at Volvo Cars, said in the statement.
The statement also said that the transactions will be carried out in two steps, provided it gets the nod from the regulatory authorities. It will start next year when the joint venture requirement for auto manufacturing in China will be lifted, and seen formally completed in 2023. The statement also clarifies that no employees or partners within the relevant companies will be directly affected by these transactions.
Under Geely's ownership, Volvo Cars has grown from strength to strength in the world's largest car market. Volvo sold 166,617 cars in China last year, up by more than 7 per cent compared to what it could in 2019. This year, in the first six months, Volvo's sales in China has also increased by nearly 45 per cent compared to the same period last year, and by more than 40 per cent compared to the same period in 2019.
Chinese car manufacturer Geely Holding Group was already manufacturing its own cars before it acquired Volvo Cars from Ford Motor in 2010. Volvo is currently considering to launch its initial public offering (IPO) and stock market listing.