Geely denies financial troubles triggered by Volvo’s acquisition image

Reports in Chinese media say Geely Automobile has been under pressure from foreign investors lately as the automaker owes large sums to foreign investors.

According to an article from, Geely had borrowed high interest funds when purchasing Volvo, with liability rates now exceeding 73 percent.

Geely’s lawyers were quick to deny the reports, calling them entirely unfounded and aimed at ruining the image of the carmaker and of CEO Li Shufu. They also added that they are taking legal measures against the website. According to the report from, Geely was able to acquire Volvo after it borrowed loans from the authorities and national banks and issued high interest bonds to foreign banks.

Geely Holdings’ liabilities have soared from 4.78 billion yuan ($698.66 million) to 71.07 billion yuan ($10.69 billion) last year, an increase of 73.4 percent. According to an August investment report by Goldman Sachs, Geely secretly began contacting foreign private equity firms such as the Carlyle Group in order to have Goldman Sachs’ bonds returned.

The story gave a damaging media blow to the Chinese carmaker, who has already filed claims agains the site. Geely also stated that its liability rates were reasonable and not a cause for concern, as Western manufacturers generally have rates of 70 to 80 percent.

  • Volvo Owner

    Once Geely bought Volvo I’d been expecting a subsequent cash infusion, and the resumption of TV ads by Volvo (I noticed none during the 2010 Olympics) and a return to ethical customer service, so I have long wondered about stuff like this.

    As of 2013, Volvo is still sticking it to customers.

    Apparently Volvo have decided that, given its small market share, it is more cost-effective to lure in new suckers based upon Volvo’s former reputation than to try to retain existing customers who already know how far the marque has slipped (heck, compared to how it treated its customers in the 20th century, it’s as if Volvo has fallen and can’t get up!), even though customer loyalty is a large part of how Volvo has (had?) survived through the decades.

    Clearly, Ford got more (when I look at a new Ford Fusion, I see the long-promised but never-delivered efficient new S60) from Volvo than vice versa from that earlier acquisition…