A few days ago, Volvo Cars has signed an agreement with its parent company, Geely Holding Group, to acquire shares in Geely’s holding company, a Chinese joint venture between the two parties, so as to fully integrate Volvo Cars’ manufacturing, R&D, and sales operations in China.It is reported that by acquiring another 50% of the shares of Daqing Volvo Car Manufacturing Co., Ltd. and Shanghai Volvo Car R&D Co., Ltd., Volvo Cars will further consolidate its position in China and expand its influence in the Chinese market.
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Although the two joint ventures have achieved financial consolidation in the Volvo Car Group, Volvo Cars will obtain a larger share of net income and assets after a wholly-owned holding. Hanken Samuelson, CEO of Volvo Car Group, said: “Through this agreement, Volvo Cars will become the first global car manufacturer to fully integrate its Chinese operations.”
Geely Holding Group CEO Li Donghui said: “Geely Holding and Volvo Cars continue to seek the best way to achieve the best asset portfolio within the group. This transaction will establish a clearer shareholding structure between Geely Holding Group and Volvo Cars to ensure that both parties can achieve maximum value. Synergy effect.”
The transaction will be divided into two steps. It is expected to start with China’s removal of restrictions on foreign shareholding in passenger vehicles in 2022 and formally complete in 2023. The transaction must be approved by the regulatory authorities, the two parties will not disclose the details of the transaction, and the employees and partners of the relevant company will not be affected.
At present, China is the largest single market for Volvo Cars. In 2020, Volvo Cars’ sales in China were 166,617 vehicles, an increase of 7.5% over 2019, setting a record for sales in the Chinese market for eight consecutive years. In the first half of 2021, sales volume increased by 44.9% year-on-year.