Essay: The Motive behind the Acquisition of Volvo

Sample Essay

In the middle of 2010, a long-term strategic plan of Geely group turned to be a success story for the company when it acquired Volvo from Ford Motors (Nicholson, 2010). Geely is the leading automotive Chinese group and currently stands among the top ten Chinese automakers. It is however believed that acquiring Volvo is the biggest overseas acquisition China has so far witnessed in its automotive industry. The motive behind this acquisition is aimed at the fulfillment of Geely’s global strategy.

Chinese automotive industry was in the ultimate state to go for global expansion. Geely was however impressed with the green technology of Volvo and its unique design concept. This defines the strategic target of Geely for the acquisition. To achieve this objective, Geely declared its financial strength to be in total position for the acquisition of Volvo (Fangfang 2010).

 Volvo cars a subsidiary concern of Ford Motors is based in Sweden. The firm is a well-known premium car seller with core values for its customers such as safety, quality, environmental care, and design.

The acquisition was also in the great interest of Ford Motors after being affected by the economic setback the US witnessed in the recent past.  The total worth of the acquisition is USD $1.8 billion.

The headquarters and plants of Volvo remained in Sweden while making a change in the corporate governance of Volvo. The chief executive of Volkswagen American group Mr. Stefan Jacoby became president and chief executive officer, while appointing Hans Oscarsson as the chief financial officer of Volvo cars (Volvo 2010).

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