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The Chinese auto maker, Geely, has completed its 1.8 billion U.S. dollar deal to buy Volvo from Ford. It's the biggest purchase of a foreign car maker by a Chinese company.
Geely's Chairman Li Shufu started out making refrigerator parts and motorcycles. He has since been dubbed the Henry Ford of China. And now, he is set to become the new chairman of Volvo.
Li Shufu, more commonly nicknamed China's peasant auto-tycoon, has ambitious plans for the 24-year-old Geely company. He plans to turn Volvo's fortunes around, by setting up a new manufacturing base in China, doubling the Swedish car maker's capacity to take advantage of the country's vast auto market.
Geely's target is to sell 150 thousand Volvo cars in China annually by 2015. Meanwhile, Volvo's European operations will continue to supply the company's international market.
The global financial crisis has taken a heavy toll on Volvo, denting its sales in recent years. In 2009, the company recorded a pre-tax loss of 653 million US dollars.
Geely says it is prepared to pump up to 900 million U.S. dollars in capital into Volvo. This comes on top of the 1.8 billion that Geely is already paying Ford for the Swedish brand.
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