21 Jul 2021
Volvo Cars to take full control of its Chinese operations
Volvo Cars is acquiring additional shares in the joint ventures Daqing Volvo Car Manufacturing and Shanghai Volvo Car Research and Development.
After the completed transaction, Volvo Cars will take full ownership of its plants in Chengdu (pictured) and Daqing.
Volvo Cars has made a deal to buy out our parent company Geely Holding’s stake in our joint ventures in China, with the aim of taking full ownership of our car manufacturing plants and sales operations in the country.
“With this agreement, Volvo Cars will become the first major non-Chinese automaker with full control over its Chinese operations,” said Håkan Samuelsson, chief executive of Volvo Cars.
By acquiring an additional 50 per cent of the shares in the joint ventures (Daqing Volvo Car Manufacturing and Shanghai Volvo Car Research and Development), we will strengthen our position in China, which is our largest market, and maximise exposure to one of the fastest growing regions globally.
“Our company has grown significantly faster than the average market in China in recent years and we will continue to invest in the country to keep that momentum going”
Although the two joint ventures are already fully included in Volvo Car Group’s financial statements, our share of their net income and equity will increase after this transaction.
“Geely Holding Group and Volvo Cars are continuously evaluating the best way to collaborate and structure operations within the wider Group,” said Geely Holding chief executive officer, Daniel Donghui Li. “These two transactions will create a clearer ownership structure within both Volvo Cars and Geely Holding.”
Our company has grown significantly faster than the average market in China in recent years and we will continue to invest in the country to keep that momentum going. Once the transactions are done, we will have full ownership of our manufacturing plants in Chengdu and Daqing, our national sales company in China and our R&D facility in Shanghai.
Volvo Cars’ manufacturing plant in Daqing.
The transactions, which are pending regulatory approvals, will be completed in two steps, starting in 2022 when the joint venture requirement for auto manufacturing in China will be lifted. They’re expected to be formally completed in 2023.
Employees and partners within the relevant companies will not be directly affected by the transactions, and financial details will not be disclosed.
