Geely will spend CNY 69 billion on Volvo, as Guangzhou Auto forms a new JV with Mitsubishi
Although apparently punitive legislation limiting the number of joint ventures in the auto sector are still very much in place, foreign car brands are still vying for a share of the soon-to-be world's largest auto market. Geely will up its spending on Volvo, while Mitsubishi forms a new JV with Guangzhou Auto.
Zhejiang Geely Holding Group, which bought the suffering Swedish automaker Volvo Car Corp from Ford in 2010, has announced plans to spend CNY69 billion ($11 billion) over the next five years on reviving the brand. Geely boss Li Shufu hopes to “give the brand its strength back”, increase Chinese deliveries from 47,000 in 2011 to 200,000 units by 2014 and beef up the carmakers' research and development unit.
Guangzhou Auto has also teamed up with Mitsubishi Motors Corp in a 50-50 joint venture, a project that has been in the pipeline since 2010. Guangzhou Auto has two other joint ventures with Honda Motor Co and Toyota Motor Corp.