Geely says Volvo will retain IPR in purchase deal | Shanghai Daily

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November 28, 2009

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Geely says Volvo will retain IPR in purchase deal

GEELY Holding Group Co, which is in talks to buy Volvo Car Corp, emphasized that the Swedish car maker will retain intellectual property rights but an analyst said that the deal may not suit the best interests of China's automotive industry.

The privately-owned Chinese car maker, which intended to acquire 100 percent of Volvo from Ford Motor Corp, will be allowed to use Volvo's core IPR, including safety and environment protection, the company said yesterday after its Chairman Li Shufu completed a week-long visit to the European Union and Sweden where Volvo Car is headquartered.

"Volvo Car will retain the ownership of core IPR technologies as well as the right to use some of Ford's IPR it needs for business development," according to a statement.

Ford, which is selling the money-losing Volvo brand to focus on its own business, named Geely as the preferred bidder for the Swedish brand in October. Earlier media reports said discussions between Geely and Ford may fail on the issue of IPR ownership and leakage.

But an analyst now sees the deal, which had earlier been touted as being able to improve Geely's technology capability, as not what it was earlier made out to be.

"Geely is not allowed to use the IPR on its own-brand vehicles, which makes the deal incomplete," said Xu Caihua, an auto analyst at Guodu Securities Co. "Geely wants to develop new products to suit the Chinese market. But it lacks capital, management expertise and necessary technologies. As a weaker Chinese company, acquiring a stronger international brand will be very difficult to succeed."

The Geely group is said to be willing to pay about US$2 billion for Volvo, which is about a third of the price when Ford bought the brand.




 

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