Geely has also noted it will have no difficulties in producing cash support to fund its recent acquisition of Volvo.

 

Geely says although the price tag for the deal with previous-owner Ford is 1.8 billion US dollars, it will need more than that to revive the Swedish carmaker.

Yin Daqing, VP Geely Holding Company, said, "The capital requirement for the the agreement with Ford has all been arranged, totaling 1.8 billion yuan. But there will also be some cash flow needed for Volvo operations after the purchase. We expect that amount to be under 2.7 billion US dollars."

Geely says half of its acquisition funds come from overseas channels. And the rest is from domestic funding sources, 50 percent of which has been offered by Geely itself.

Geely's Chairman Li Shufu believes the biggest obstacle for Volvo is its relatively small output scale. Limited output capacity increases unit production costs for manufacturers. He says that's why Volvo has recorded continuous losses.

Geely believes the core of the deal is the Intellectual Property Rights.

Zhao Fuquan, VP Geely Holding Company, said, "As Geely owns 100 percent of Volvo Cars, it also owns the intellectual property rights of the company's achievements in passenger safety and environmental protection fields."

But not many people are excited about the case. Many fear that the Volvo Cars Labor Union may restrain the future Geely has mapped out for the Swedish automaker.

Li Shufu, Chairman, Geely Holding Company, said, "We know that the labor union is a very important organization to support corporate development and improve corporate competitiveness. The issue now is to build a well established communication channel with the labor union. "

Geely says it already talked with the Volvo Cars Labor Union during its 2-year takeover talk. And the union is satisfied with the terms that Geely signed with Ford. Meanwhile, the Chinese Private Auto Makers has stressed that it will fully respect Volvo's existing distributors and suppliers.