Geely to Launch Chinese-Made Volvo

Although Geely assured everyone that Volvo's operations would remain untouched once the Swedish unit steps under its ownership, the company will actually suffer some slight changes. Mostly because it will become a more Chinese-oriented manufacturer, as Geely intends to build cars in its domestic market and even set up a new plant locally.

The most important question is whether people over the world would buy a Chinese-made Volvo, as some of the models produced in local plants failed to impress when it comes to safety standards.

Volvo is already famous for its high-safety and innovative technologies but some people believe that moving a part of its production in Chinese plants might affect several attributes of the models sold under the Swedish badge.

Ford is already producing the S40 in China with the help of its local venture with Chongqing Changan Automobile Co. Still, according to Reuters, the locally-made S40 is 50 percent cheaper as compared to the imported models, despite the fact that it comprises the same features as the made-in-Sweden version.

Geely reached an agreement with Volvo in late December, with the deal expected to be signed in the first quarter of 2010.

"While some work still remains to be completed before signing – including final documentation, financing and government approvals – Ford and Geely anticipate that a definitive sale agreement will be signed in the first quarter of 2010, with closing of the sale likely to occur in the second quarter 2010, subject to appropriate regulatory approvals," a statement rolled out by Ford in December read.

"The prospective sale would ensure Volvo has the resources, including the capital investment, necessary to further strengthen the business and build its global franchise, while enabling Ford to continue to focus on and implement its core ONE Ford strategy."