Volvo Cars has signed an agreement with its parent company, Geely Holding, to acquire the latter’s stake in the two companies’ joint ventures in China, with the aim of taking full ownership of its car manufacturing facilities and sales operations in the country.

The acquisition of an additional 50% of the shares of Daqing Volvo Car Manufacturing Co., Ltd. and Shanghai Volvo Car Research & Development Co., Ltd. is expected to strengthen Volvo Cars’ position in China, its largest market, while maximizing its positioning in one of the fastest growing regions globally.

Although the two joint venture companies are already fully included in Volvo Car Group’s balance sheet, Volvo Cars’ share of their net income and equity will increase as a result of the transaction.

“With this agreement, Volvo Cars will become the first major non-Chinese automaker with full control of operations in China,” said Håkan Samuelsson, CEO of Volvo Cars.

“Geely Holding Group and Volvo Cars continue to explore how best to collaborate and organize operations within the Group in an expanded sense. These two transactions will enable a clearer ownership structure within both Volvo Cars and Geely Holding,” commented Geely Holding CEO Daniel Donghui Li.

Volvo Cars acquisirà la piena proprietà delle attività in CinaVolvo Cars acquisirà la piena proprietà delle attività in Cina

Volvo Cars has grown much faster than the average Chinese market in recent years and will continue to invest in the country to maintain this strong upward trend. As a result of the planned transactions, Volvo Cars will acquire full ownership of its production facilities in Chengdu and Daqing, its national trading company in China and its research and development unit in Shanghai.

See also  Tesla Autopilot: U.S. investigates after crashes with emergency vehicles

The transactions will be completed in two phases: they will begin in 2022, when the joint venture obligation for car production in China is lifted, and are expected to be formally completed in 2023.

The company has experienced strong growth in the Chinese market in recent years. In 2020, it sold 166,617 cars in China, registering a 7.5% increase over 2019 and its eighth consecutive sales record in this market. In the first half of 2021, sales were up 44.9% over the same period in 2020 and 40.1% over the same period in 2019.

For all macitynet articles dealing with cars, electric vehicles and smart mobility we refer to the <a href=”” target=”_blank” rel=”nofollow noopener”>TravelSmart section of our site.