Marketing - Monday, March 29, 2010 11:57 - 0 Comments

Ford sells Volvo to Chinese company

International marketing news is reporting that Ford has agreed a deal with a Chinese private automotive company to sell Swedish brand Volvo.

The deal, worth around $1.8bn, is considerably less than the estimated $6.5bn that Ford paid for Volvo back in 2009. However, since that time, Volvo has been making considerable losses, prompting Ford to make the decision to sell to Chinese organisation Geely.

It is reported in The Daily Mail, that such a sale would free up Ford to concentrate on its core brands after a recession that has seen car manufacturers – particularly in the US – suffer, with well-known makes such as Chrysler filing for bankruptcy.

This is not the first time that Ford has sold off parts of its business, as in 2006, the company sold luxury marque Aston Martin to a UK led consortium from Prodrive.

Geely are set to focus on expanding the Chinese arm of the business, to make it of equal size to the European business, according to The Telegraph, as well as retaining the brand’s core features of quality, safety and design. Moreover, it seems the deal will make China one of the biggest car exporters in the world, overtaking the likes of the US and Germany.

Chairman of Geely, Li Shufu was cited in Brand Republic as saying of the deal ”Volvo is a great brand with an excellent product line-up. This agreement provides a solid foundation for Volvo to continue to build its business under Geely’s ownership.”