Not only did the Chinese deny the rumors claiming they are eyeing Volvo, but the source claims Geely has been working on the plan to buy Volvo for some three years now. WSJ notes that Geely will submit the bid through its mother company, and not through its Geely Automobiles Holding unit.
Geely will reportedly use Chinese based engineers to provide basic engineering tasks on the products designed by their Swedish colleagues. The production of Volvo cars in China, as well as the increase in units sold in the country are on Geely's agenda.
Even if in the beginning Ford has been reluctant about the prospects of a Chinese-run Volvo, it would appear that now the American manufacturer fells Geely may manage the task. Back in mid-June, Chinese media reported that the Chinese company has already received the support of the Dongying government. Additionally, the local officials could inject more money into Geely in order to build a new production facility in the region.
WSJ reported that Geely Chairman Li Shufu has not-so-reassuring plans for Volvo: cut production costs, especially by using the cheaper Chinese workforce. Volvo would retain its current management, as no merger of Volvo with Geely is being planned.
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