Zhejiang Geely Holding Group Co., the Chinese buyer of Volvo Cars, plans to invest $900 million in the Swedish carmaker to bring it out of loss-making to profitability, Bloomberg reported today.
Geely founder Li Shufu said yesterday that the company will draw up a series of “development plans” to revive Volvo. The private Chinese carmaker has raised about $2.7 billion to fund the Volvo purchase and operations, half of which from overseas.
“The deal won’t work if Volvo continues to rely on blood transfusions,” Li said. “We will help it recover the ability to generate blood.”
He is planning a factory in Beijing that will make 300,000 Volvo cars annually, doubling its current output. Li aims to turn Volvo’s loss-making into profit within two years.
Geely signed a deal on March 28 to buy Volvo from Ford Motor for $1.8 billion. The Chinese automaker is seeking to boost profit by offering more expensive models at home and by selling 50% of its cars overseas by 2015.
Volvo’s headquarters will remain in Gothenburg following the deal and Ford will continue to supply some parts and other support. Geely aims to complete the acquisition in the third quarter, Li said earlier this week.