Volvo Cars now has a government partner among its investors, but it is not the Swedish state, TV4’s business news program Ekonominyheterna reported late on Wednesday.
It is Chinese investment company Daqing, which participated in the purchase with Volvo parent Geely Automotive, also from China. With the deal, Daqing will become a large minority shareholder, owning about 40 percent of Volvo Cars, according to TV4 data.
Olle Axelson, director of communications at Volvo Cars, is positive that a strong backer for the company is coming in.
“This signifies financial security for the deal,” he told news agency TT, referring to the deal Geely inked with Ford to acquire Volvo Cars for $1.8 billion on March 28th, which is expected to close by the third quarter.
According to Dagens Industri, quoting sources close to the deal, the purchase will be finalised in August, AFP reported.
Geely has previously promised that no Swedish jobs will end up in China and that research and development would remain in Sweden.
When asked if he trusted Geely to keep its promises, Axelson said, “Of course, this has been clearly expressed to employees. One cannot move a car factory because it is such a regulated operation with thousands of subcontractors in many segments.”
He added, “Geely is a commercial company, while Daqing is state-owned and politically controlled. What significance this will have is too soon to say.”
Geely’s owners have previously said that they will open a production plant in China.
According to TV4, Daqing has imposed a requirement on the deal that they have influence over where the Chinese factory will be built.
“I do not know how this relationship works,” said Axelson in refernece to the kind of demands Daqing can make as a major shareholder. “However, a plant cannot be built anywhere without it being in the right place logistically. There are many parameters that govern the decision.”