Volvo Cars has acquired its parent company, Geely Holding’s, share in the joint ventures between the two companies in China, with the intention of taking full ownership of manufacturing 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 Volvo Cars, CEO, Håkan Samuelsson.
This follows after an agreement was made to acquire an additional 50% of Daqing Volvo Car Manufacturing and Shanghai Volvo Car Research and Development.
Following the acquisition, Volvo Cars will now have full ownership of its manufacturing plants in Chengdu and Daqing, its national sales company in China, and its R&D facility in Shanghai. Before this, all Volvo operations were executed under joint ventures with local companies.
“The agreement will create a clearer ownership structure within both Volvo Cars and Geely Holding,” said Geely Holding, CEO, Daniel Donghui Li.
The deal is said to be formally completed by 2023, once the joint-venture requirement for automotive manufacturing is lifted in China next year. The initiative was previously laid down by the Chinese government to encourage technology and information transfer to local car manufacturers.