Volvo May Become China's Official State Car - Audi Threatened

After an infinity of rumors, negotiations and versions of the same story, Zhejiang Geely Holding Group has recently signed the contract for purchasing the Volvo brand from Ford Motor Company. Among other implications, the acquisition is said to be a threat for the Audi A6’s job as the Chinese state’s official car, as ozcarguide reports.

Li Shufu, the man who leads Geely, is currently looking forward to beginning the development of the company, after acquiring Volvo for around $2 billion.

Li, now 47 years old, is known as a career man who has been following Henry Ford’s way due to his ambition to become an affordable car-volume manufacturer. One of his most ambitions plan is to build a Volvo-dedicated production site in Beijing, that would have a production capacity which would allow China to manufacture the same number of Volvo cars as foreign countries.

According to John Zeng, an analyst working with IHS Global Insight, an industry consultancy, Li Shufu’s plans have reached a huge level and the risks associated with this are incredibly high. However, Zeng told the aforementioned source that he could succeed because he uses the fast-growing Chinese market to achieve his goals.

Last year, China became the world’s greatest automotive market, surpassing the U.S. for the first time in history. In addition to that, China also became the world’s number one car-producing country. January 2010 was an excellent month for the automotive sales in China, as these grew by 124 percent compared to those registered in January 2009.