joint statement , increase its stake

Volvo Cars has signed a deal with its parent Zhejiang Geely Holding Group to buy out the latter’s shares in their joint ventures in China to take full control of its manufacturing and sales in the world’s largest auto market as Beijing opens up more industries to foreign investors.

The agreement, which is awaiting the approval of China’s regulators, will see Volvo Cars acquire Geely Holding’s 50% stake in Daqing Volvo Car Manufacturing Co. Ltd. and Shanghai Volvo Car Research and Development Co. Ltd., according to a joint statement released on Wednesday.

The two transactions, for which financial details were not disclosed, will give the Swedish carmaker full ownership of its production plants in Chengdu and Daqing, its Chinese sales company and its R&D facility in Shanghai, the statement said.

Holding full ownership means Volvo Cars could prevent its technologies from being shared with local partners, and grants it the right to pocket all benefits earned in the Chinese market, where the company sold 166,617 cars in 2020, a year-on-year increase of 7.5%.

Volvo Cars said the transactions will start in 2022, when the Chinese government will remove the restriction on foreign ownership in joint ventures producing passenger vehicles. The transactions are expected to be formally completed in 2023.

From 1994, Beijing followed an industry policy requiring foreign carmakers to set up joint ventures with local partners before making cars in China. This lasted until 2018 when the rule was partially eased with the lifting of the cap on foreign ownership in joint ventures producing new energy vehicles.

In 2020, Beijing removed the foreign ownership restriction on commercial vehicle manufacturing.

Wednesday’s announcement comes more than a week after Volvo Cars announced plans to increase its stake in Geely-backed Swedish electric-vehicle maker Polestar to 49.5% by acquiring the additional shares from PSD Investment, the private investment company of Li Shufu, chairman of both Volvo Cars and Geely Holding.

Contact reporter Ding Yi (yiding@caixin.com) and editor Heather Mowbray (heathermowbray@caixin.com)


Japan travel news, japan travel guides, japan holiday destinations and japan reviews

LATEST NEWS

NEWS RELATED

China stocks: New Oriental, TAL Education scrap earning releases, media calls amid regulatory storm

New Oriental Education and TAL Education, two of China’s largest tutoring services providers, have cancelled their upcoming earnings releases and media calls amid Beijing’s intensified crackdown on off-campus tutoring. The companies separately announced the cancellations on Friday, citing “recent regulatory developments” as the reason, without further elaborating. New Oriental Education…

Read more: China stocks: New Oriental, TAL Education scrap earning releases, media calls amid regulatory storm

From Peregrine to Next Digital: Hong Kong invokes rarely-used powers in company law

Hong Kong’s government this week appointed Clement Chan Kam-wing of accounting firm BDO as a special inspector to look into the financial affairs of Next Digital, the publisher of the now-defunct Apple Daily newspaper. It marks the first time in 22 years the government has invoked a clause in the…

Read more: From Peregrine to Next Digital: Hong Kong invokes rarely-used powers in company law

China’s Big Tech crackdown: Will Beijing’s efforts kill the country’s most vibrant economic sector?

Beijing’s campaign to rein in the power and influence of Big Tech in the country is reaching new heights, pummeling tech stocks and leading many analysts to question if the tougher scrutiny could end up emasculating the most vibrant sector of China’s economy. China’s full complement of regulators have let…

Read more: China’s Big Tech crackdown: Will Beijing’s efforts kill the country’s most vibrant economic sector?

Opinion: The Who, What and Why of China’s Regulatory Campaign

China’s regulatory crackdown has sent shockwaves through global stock markets. Photo: VCG Stocks of offshore-listed Chinese companies have slumped recently amid Beijing’s sweeping regulatory actions targeting a range of industries from fintech and ride-hailing to after-school education. Overseas investors are withdrawing capital across numerous sectors in a panic as they…

Read more: Opinion: The Who, What and Why of China’s Regulatory Campaign

China hatches a plan to lead in the adoption of new internet protocol as Beijing eyes internet of things

China wants to achieve global leadership in the next-generation IPv6 internet protocol by 2025 as Beijing prepares itself for the internet of things (IoT) era, when a washing machine or a microwave oven may have their own IP address. According to a document released by the Cybersecurity Administration of China,…

Read more: China hatches a plan to lead in the adoption of new internet protocol as Beijing eyes internet of things

Amazon fined US$880 million by Luxembourg authorities over data privacy breach

Amazon was fined €746 million (US$880 million) by Luxembourg authorities over allegations it flouted the EU’s data protection rules, the online retail giant said on Friday. The fine was issued on July 16 by the Luxembourg National Commission for Data Protection following its determination that “Amazon’s processing of personal data…

Read more: Amazon fined US$880 million by Luxembourg authorities over data privacy breach

China Orders 25 Tech Giants to Fix Raft of Problems

(Bloomberg) — China ordered 25 technology companies to carry out internal inspections as part of a campaign to root out illegal online activity. The Ministry of Industry Information Technology told its largest internet and hardware companies including Alibaba Group Holding Ltd. and Tencent Holdings Ltd. Friday to carry out internal…

Read more: China Orders 25 Tech Giants to Fix Raft of Problems

SEC Requires Additional Disclosures for Chinese IPOs

U.S. Securities and Exchange Commission Chairman Gary Gensler The U.S. Securities and Exchange Commission will require additional disclosures from Chinese companies seeking to sell stock in the U.S. as the Chinese government’s crackdown on foreign listings and enhanced cybersecurity reviews are “relevant to U.S. investors.” SEC Chairman Gary Gensler asked…

Read more: SEC Requires Additional Disclosures for Chinese IPOs

Joe Biden, US lawmakers working on parallel tracks to bolster China tech policy

US regulators step up scrutiny of IPO hopefuls from China

China's Politburo confirms clampdown on overseas tech listings

China's Xiaomi overtakes Apple as No. 2 smartphone vendor

US sets new disclosure rules for Chinese IPOs coming to American stock markets

China’s transport ministry puts more pressure on Didi with strong words on regulation and compliance

Beijing summons Alibaba, Tencent, ByteDance, 9 other tech firms over data security concerns

Hong Kong bank deposits rose 11.5 per cent in the first half as investors chased highly anticipated IPOs

OTHER NEWS