Ford Motor Company announced that it has settled all the substantive commercial terms with China's Geely Holding Group Company Limited on the prospected sale of its Volvo unit.
Ford commented that some works such as final documentation, financing and government approvals need to be done before the deal is sealed. However, the company anticipates that a definitive sale agreement will be signed in the first quarter of 2010, with closing of the sale likely to occur in the second quarter of the same year.
The Detroit automaker added that it would continue to cooperate with Volvo Cars in several areas after the sale, but it does not plan to retain any shares in the business.It is believed that Geely is offering the U.S. automaker around $2 billion dollars for the Swedish brand, which is less than a third of what Ford paid for the it a decade ago. With the prospected sale of Volvo, Ford will offload the last brand in the Premier Automotive Group that also included Jaguar, Land Rover and Aston Martin.
Personally, I feel that such a move will not do any good to the image of Volvo. Geely's brand image is that of a basic budget vehicle while Volvo has a strong continental image with an emphasis on safety. In an image conscious society like Singapore, I am not sure how many buyers would be willing to fork out a premium amount for a car whose parent company is associated with budget products.
Volvo has some interesting lineups in the coming year, such as the S60. It would be sad that the sales of these wonderful vehicles be jeopardized by the potential Geely takeover. I hope that the sale of Volvo to Geely would not take place eventually.