The auto industry recession that hit Europe hard has shown signs of letting up and one of the biggest markets is China, with its growing middle-class and where cars are still being sought as signs of prosperity, auguring well for EU and other automakers, including those with European affiliates. German auto giant Volkswagen AG reported a 37% surge in vehicle sales in its biggest global market last year, saying it expected more strong growth in China in 2010, while Ford – which has links to EU carmakers like Volvo – said it showed a 44% jump in the Chinese market.
That comes as one of China’s biggest automakers, Geely, said it would acquire Volvo from Ford, which had selected the Chinese company as the buyer.
Geely said Volvo will retain ownership over key technologies and intellectual property that it has developed and will retain access to all of Ford’s intellectual property that Volvo had been planning to use to implement its business plan, Motor Age reported. Geely would obtain Volvo’s key technologies and intellectual property through the acquisition and would also be eligible to use some Ford-owned technologies held by Volvo, including those relating to safety and environmental protection.
According to Geely’s spokesman Yuan Xiaolin, Geely Group chairman Li Shufu and executives have visited Volvo’s two major production bases in Sweden and Belgium, and discussed the takeover deal with Volvo’s executives, senior officials of the Swedish and Belgian governments, and representatives of Volvo’s workers unions. Yuan adds that Geely is committed to protect the brand and value of Volvo, especially the brand’s advantages in its product quality and safety, as well as brand management and engineering technologies.
Volkswagen Group China said just more than 1.4 million vehicles were delivered to its mainland China and Hong Kong customers in 2009, an increase of 36.7% from 2008. “We have increased our forecast several times; the automotive market went beyond everybody’s expectations,” Winfried Vahland, President of Volkswagen Group China, said in a statement of the 2009 results. The company said it sold 1.12 million Volkswagen-brand vehicles, an increase of 32.% from 2008. Volkswagen’s Audi division sold 158,941 vehicles, a rise of 32.9%, while sales of its Skoda vehicles more than doubled to 122,556. “Based on our excellent performance in 2009, we are confident about achieving our objective of doubling the sales to two million vehicles, laid down in our Strategy 2018, much earlier than planned,” Vahland said.
The company said it plans to invest more than four billion euros ($5.75 billion) in China over the next three years to expand capacity and launch 20 new or updated models over the next three years. “We are full of confidence for 2010, expecting a growth rate of 10 to 15 percent for the total automotive market in China,” Vahland said.