Chinese Automaker Intensifies Bid, Hoping To Upgrade Technology And Tap New Markets In China And Overseas#
We've written before about Chinese automaker Geely's bid to purchase Ford's ailing Volvo marque. Geely's current status as the preferred bidder looks solid, as the company announced today that it has lined up at least $1 billion in loans from Chinese banks to bankroll its $1.8 billion bid. From Reuters:
Home-grown Geely, which means "lucky" in Chinese, is hungry for modern and innovative technologies from the Swedish brand to upgrade its car lineup and tap the auto market in China, the world's biggest.
At least three major Chinese banks including Bank of China, China Construction Bank and Export-Import Bank of China had agreed to extend loans to Zhejiang Geely Holding Group, said the banking sources briefed on the plan.
"Money is not a problem for Geely," said a source. "They definitely have strong support from Chinese banks and there are a number of private equity funds queuing up to invest in Geely."
Geely's obvious motivation to purchase Volvo as soon as possible reflects the company's desire to be accepted not only as a low-cost, mediocre-quality domestic Chinese automaker reaching only a few markets in developing countries, but to be taken seriously as a luxury carmaker within China and as a quality automaker outside of China. As the Chinese auto industry struggles to consolidatehundreds of brands into a core group of "champions," Geely is attempting to set itself above other rivals, such as Beijing Auto and Sichuan Tongzheng, who have set about trying to acquire ailing Western brands in recent months.