A ceremony took place in London today to mark the completion of the purchase of Volvo Car Corporation by China’s Zhejiang Geely Holding Group. The deal was signed on March 28 this year, and ratified by the Chinese government on July 26, by the EU on July 6, and by the US still earlier.

Ford Motor bought Volvo Cars in 1998/99 for $6.45 billion. As part of Ford’s Premier Automotive Group (PAG), Volvo posted a loss of $1.465 billion in 2008 and of $0.653 billion in 2009. On March 28 2010, Geely agreed to pay Ford $1.8 billion for complete ownership of Volvo Cars’ assets. According to Chinese media, Geely actually paid $1.5 billion, including $1.3 billion cash.

Li, Shufu, head of Geely, becomes Chairman of the Board of Directors of the new Volvo, with Hans-Olov Olsson serving as Vice Chairman. Stefan Jacoby, CEO of Volkswagen North America, will join in and work as President and CEO, replacing Stephen Odell. Hans-Oskarsson will be the new CFO.

The headquarters will stay in Sweden. Two European factories, one in Sweden, the other in Belgium, will keep running.

In China, Volvo has a production line in Chongqing, which was formerly owned by Chang’an Ford and has produced models of S40 and S80L. Geely plans to build a new Volvo factory in China with a planned capacity of 300,000 units a year.

In previous statements, Geely has said that it wanted to maintain the image of Volvo as a luxury European brand, albeit owned by Chinese. However, in order to cut costs and boost capacity and sales, Geely must rely on the Chinese production and consuming power, which may well jeopardize the first goal. How Geely can achieve both objectives remain to be seen.

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