2010 Volvo V50

2010 Volvo V50

Late last month Ford confirmed that it would sell Volvo and most of its assets to Chinese automaker Geely for a significant $1.8 billion, so it’s not surprising that the buyer is expecting to make a return on its investment. According to Geely, the money could be flowing into Volvo’s coffers as early as the fourth quarter.

In the past, negative currency effects, mainly due to the weak U.S. dollar, and increasing raw material prices have deteriorated Volvo’s financial situation, though Geely believes it can overcome these problems.

"As far as I know, Volvo is in good operating condition and it's possible it could break even in the fourth quarter of this year," Geely CEO Gui Sheng Yue revealed to Automotive News.

This is hard to imagine considering Volvo hasn’t made a profit since 2007 but Geely does have a major advantage that previous owner, Ford, did not. Geely has access to the world’s biggest automotive market, China, and with a global brand under its belt Geely will be able to build its profile, both in China and the rest of the world, significantly. There’s also the likely possibility that Geely will start manufacturing and even designing new Volvo models in China as well as just selling them.

Last year Geely sold a total of 326,710 vehicles, which is slightly above 4 percent of the Chinese market.

[Automotive News, sub req’d]