Come 2022, China will formally scrap possession limits on international automakers and the joint-venture agreements with native Chinese language firms that these limits require.
Volvo introduced on Wednesday that it’ll benefit from the rule change by shopping for out its numerous Chinese language joint ventures. The joint ventures cowl vegetation and gross sales operations, and in every case the opposite proprietor is Geely, Volvo’s dad or mum firm.
The transaction is predicted to be accomplished in 2023 and can make Volvo the primary international automaker with full possession of its Chinese language operations. Different automakers reported to be planning related strikes embody BMW Group and Volkswagen Group.
Volvo mentioned there might be no job losses brought on by the transfer. The automaker additionally mentioned no monetary particulars might be disclosed.
The transfer will enhance Volvo’s publicity to the Chinese language market, the world’s greatest for brand new automobiles, and may have a constructive impression on its internet revenue and fairness—one thing vital for any preliminary public providing made by the Swedish automaker. Volvo mentioned earlier this 12 months that it’s contemplating an IPO.
Volvo bought 166,617 automobiles in China in 2020, representing about 25% of its whole gross sales. Issues might be significantly better in 2021, with Volvo’s gross sales in China for the primary half of the 12 months up virtually 45% on the identical interval a 12 months in the past, and up 40% on the identical interval in 2019.