Geely's acquisition of Volvo okayed by EU

Shanghai, July 7 (Gasgoo.com) European Union regulators on Tuesday approved Chinese carmaker Geely to buy Sweden's iconic Volvo Cars.

The European Commission said it sees no antitrust problems with Zhejiang Geely Holding Co.'s $1.8 billion acquisition of Volvo Cars from Ford Motor Co. because the takeover won't give either company the power to damage rivals.

Geely sells hardly any cars in Europe and Volvo only has "very limited" operations as a car parts supplier, it said, AP reported.

Geely is expected to complete the purchase of the Volvo car unit in the third quarter of this year, the company said in a statement recently.

Reportedly, Geely has now worked out a five-year plan for the development of the Volvo brand, under which Volvo China annual sales will reach 150,000 units by 2015.

Moreover, Geely will expand the Volvo line-up with more Volvo vehicles to increase the Volvo sedan sales in China. In the third quarter of this year, it will bring the Volvo SUV XC60 into China for local production, followed by the Volvo S60 sedan to be produced in the second quarter of 2011.

Chinese media said that Geely-Volvo (China) headquarters will probably be located in Shanghai's Jiading District, and China's National Development and Reform Commission (NDRC) should officially approve the Geely-Volvo project this month.

Furthermore, it is said that Geely is now looking to recruit new staff in Shanghai Jiading Industrial Zone and is making advances to technical staff in a few of auto-making companies or branches in Shanghai. 

Geely has drawn a blueprint for Volvo's survival, and we will make the Volvo brand profitable within two years in China, Geely Chairman Li Shufu said earlier.

Buying Volvo fits Geely's overall strategy to enhance its brand image from a low-end car producer to a bigger manufacturer with more advanced technologies as well as to make it more globally competitive, analysts said.