Sale of Volvo from Ford to Geely Complete

Today, Ford Motor Company announced that it completed the Volvo Cars sale to Zheijang Geely Holding Group of China for $1.8 billion. Geely tapped Stefan Jacoby, the ex-CEO of Volkswagen Group of America, as Volvo’s new CEO.

Jettisoning Volvo finalizes Ford CEO Alan Mulally’s plan of dropping European luxury brands in order to focus on the heart of the Ford brand. The sale of Volvo follows Ford’s divestment of Aston Martin in 2007 and Land Rover and Jaguar in 2008 to Tata Motors of India.

Ford bought Volvo in 1999 for $6.5 billion.

“Volvo is an excellent brand with a strong product line, and it has returned to profits after a successful restructuring. We are confident Volvo has a solid future under Geely's ownership,” said Mulally in a statement.

Mulally added: “At the same time, the sale of Volvo will allow us to sharpen our focus on the Ford brand around the world and continue to deliver on our One Ford plan serving our customers with the very best cars and trucks in the world.”

Ford reported that agreements between the automaker and the Geely Holding Group will allow Volvo and Ford “the proper use of each other’s intellectual property.”

The carmaker said it will continue working alongside Volvo in several arenas in order to effect a smooth transition but it has not kept an ownership stake in the Volvo company. Ford will also keep supplying Volvo with stampings, powertrains, and other car components.

Ford will also give information technology, engineering support, tooling access for shared components, and certain other services during the transitional period.

Volvo’s New Leadership

Jacoby takes the reins from Stephen Odell, who will return to Ford as CEO and chairman of Ford of Europe. Stuart Rowley, the head of Volvo’s finance division, will also go back to Ford as the chief financial officer of Ford’s European division.

“Volvo is a proud company with a talented and dedicated team of employees,” said Odell in a statement. “I am especially pleased that with Ford's continued investment in recent years, Volvo is well positioned for the future with an exciting range of products that remain true to its core values – safety, quality, environmental responsibility and modern Scandinavian design.”

Jacoby added: "I am honored to join a company with the prestige and growth potential of Volvo. Our employees, suppliers, dealers - and above all our customers - can be confident that Volvo will preserve its special status as the industry leader in vehicle safety and innovation - even as it pursues new market opportunities.”