Ford Sells Volvo to Geely in China's Biggest Overseas Auto Deal
Despite a domestic car market in which car sales exceeded the U.S. market for the first time in 2009, Chinese auto manufacturers moved aggressively to expand their international sales. In an effort to do so, Zhejiang Geely Holding Company, China's second largest non-government-owned car manufacturer, acquired Ford's money-losing Volvo operation in mid-2010 for $1.8 billion. The purchase price consisted of a $200 million note and $1.6 billion in cash.
Geely sees this acquisition as a way of moving from being a maker of low-priced cars affordable in the Chinese mass market to selling luxury cars and penetrating the European car market. Geely has publicly stated that it hopes to have one-half of its revenue coming from international sales by 2015. With 2,500 dealerships in more than 100 countries, acquiring Volvo is seen as a significant first step in achieving this goal.
As part of the agreement, Ford will continue to sell Volvo engines and other components and to provide engineering and technology support for an unspecified period. Geely intends to maintain car production in Sweden and to build another factory in China within the next several years.

-What factors are likely to motivate Geely and other Chinese carmakers to ensure strict enforcement of intellectual property laws?

Question

Ford Sells Volvo to Geely in China's Biggest Overseas Auto Deal
Despite a domestic car market in which car sales exceeded the U.S. market for the first time in 2009, Chinese auto manufacturers moved aggressively to expand their international sales. In an effort to do so, Zhejiang Geely Holding Company, China's second largest non-government-owned car manufacturer, acquired Ford's money-losing Volvo operation in mid-2010 for $1.8 billion. The purchase price consisted of a $200 million note and $1.6 billion in cash.
Geely sees this acquisition as a way of moving from being a maker of low-priced cars affordable in the Chinese mass market to selling luxury cars and penetrating the European car market. Geely has publicly stated that it hopes to have one-half of its revenue coming from international sales by 2015. With 2,500 dealerships in more than 100 countries, acquiring Volvo is seen as a significant first step in achieving this goal.
As part of the agreement, Ford will continue to sell Volvo engines and other components and to provide engineering and technology support for an unspecified period. Geely intends to maintain car production in Sweden and to build another factory in China within the next several years.

-What factors are likely to motivate Geely and other Chinese carmakers to ensure strict enforcement of intellectual property laws?

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The Answer of Ford Sells Volvo to Geely in China's Biggest Overseas Auto Deal
Despite a domestic car market in which car sales exceeded the U.S. market for the first time in 2009, Chinese auto manufacturers moved aggressively to expand their international sales. In an effort to do so, Zhejiang Geely Holding Company, China's second largest non-government-owned car manufacturer, acquired Ford's money-losing Volvo operation in mid-2010 for $1.8 billion. The purchase price consisted of a $200 million note and $1.6 billion in cash.
Geely sees this acquisition as a way of moving from being a maker of low-priced cars affordable in the Chinese mass market to selling luxury cars and penetrating the European car market. Geely has publicly stated that it hopes to have one-half of its revenue coming from international sales by 2015. With 2,500 dealerships in more than 100 countries, acquiring Volvo is seen as a significant first step in achieving this goal.
As part of the agreement, Ford will continue to sell Volvo engines and other components and to provide engineering and technology support for an unspecified period. Geely intends to maintain car production in Sweden and to build another factory in China within the next several years.

-What factors are likely to motivate Geely and other Chinese carmakers to ensure strict enforcement of intellectual property laws?