Geely gets strong support from gov't for Volvo deal

Shanghai, December 31 (Gasgoo.com) Geely Auto said today that its parent Zhejiang Geely Holding Group has strong support from the Chinese government to acquire Ford Motor's Volvo unit, Reuters reported. The carmaker is seeking ways to cooperate with Volvo after the purchase.

"Without government support, the (Volvo) deal could not be done," Geely Auto CEO Gui Shengyue told reporters in Hong Kong on New Year's Eve. He said that Geely Group had financial support for the acquisition of Volvo, in addition to benefits from the government's subsidies for green cars.

Ford said last week that it had agreed with Geely on terms of selling Volvo to the private Chinese automaker and the sale would be completed in the second quarter of 2010. Geely earlier said it was raising $1 billion in loans to finance its $1.8 billion bid for Volvo.

Geely Auto is looking at ways to cooperate with Volvo Cars after the acquisition, and Volvo will likely remain a separately managed brand in the short run. However, "the ultimate goal is to inject Volvo into the listed company (Geely Auto)," said Gui.

Home-grown Geely is hungry for modern, innovative technologies from the Swedish brand to upgrade its car lineup and tap China's auto market, now the world's largest.