BEIJING – Geely Holding Group has received final Chinese government approval to acquire Volvo Cars from Ford Motor Co., the Commerce Ministry said Thursday.
Commerce officials approved the $1.8 billion deal Monday, said a ministry spokesman contacted by phone who refused to give his name. He said other agencies already have signed off on it.
"This was the final stage of the government approval," he said. "There are no conditions attached."
Geely agreed in March to buy Volvo in China's biggest foreign acquisition in the auto industry. It would give one of China's small but ambitious auto makers access to a prestigious brand and top-tier technology.
European Union regulators approved the deal in early July.
A Geely spokesman, Ning Shuyong, declined to confirm whether the approval process was complete or give details of the status of the acquisition.
"Everything is developing according to plan," Ning said by phone from the company's headquarters in the eastern city of Hangzhou, south of Shanghai.
Beijing has been encouraging Chinese companies to expand abroad, taking advantage of the global financial crisis to acquire assets at lower prices.
Industry analysts say doubt hangs over whether 13-year-old Geely can make a success of Volvo, a money-losing manufacturer on another continent.
"The uncertainty here lies on the differences of the two companies and Geely's lack of experience," said Xing Haizhi, an auto analyst for Cinda Securities in Beijing.
Privately owned Geely has built a business selling cars, motorcycles and scooters with little government support.
The deal could give Geely an edge in China, which is the world's biggest auto market and one in which foreign brands often dominate. It will also gain its first major foothold in Europe.
Volvo would be the last of Ford's European units to be sold off as the company focuses on its Ford, Lincoln and Mercury brands.
Ford sold its Jaguar and Land Rover brands to India's Tata Motors Ltd. in June 2008 for $1.7 billion.
Associated Press researcher Bonnie Cao contributed to this report.
On the Net:
Chinese Ministry of Commerce (in Chinese): http://www.mofcom.gov.cn
Geely Auto: http://www.geely
NEW DELHI – British Prime Minister David Cameron worked to deepen his nation's ties with India on Thursday, using his trip to the former colony turned rising regional power to rake in millions of dollars in new business for the struggling British economy.
Cameron was expected to cap his three-day visit to India in talks with Indian Prime Minister Manmohan Singh on how to strengthen political, security and cultural ties between the two nations.
The men also were expected to discuss British efforts to stem Indian immigration, the future of the conflict in nearby Afghanistan and reducing trade barriers for British companies seeking to do business with India.
Cameron, who was holding a hectic day of meetings with top political and business leaders, has made it clear that the main reason he came to India along with a vast delegation of Cabinet ministers and business leaders was to harness India's burgeoning economy to aid Britain's sluggish recovery from recession.
Britain is desperate to make up lost economic ground in the country. Britain was the 5th largest exporter to India in 2005, but has since fallen to 18th. Exports to India dropped from 4.12 billion pounds ($6.4 billion) in 2008 to 2.9 billion ($4.5 billion) in 2009.
On Thursday, the British government announced a series of deals between India and British architectural, high-tech and defense firms. That followed an announcement in Bangalore on Wednesday that India would buy 57 Hawk advanced trainer jets from Britain in a deal worth nearly $1.1 billion.
Britain is trying to increase its military trade with India, which traditionally buys most of its weaponry from Israel, the United States and Russia.
In Mumbai, Treasury chief George Osborne encouraged Indian regulators to allow British banks to open more branches.
Also Wednesday, Business Secretary Vince Cable announced that Britain would allow the export of its civil nuclear technology to India, mirroring an earlier agreement the United States made with India. The decision was expected to help British firms compete for business in India's civilian nuclear industry.
In addition to business ties, Cameron also was focusing on climate change and increased security cooperation between the nations, both of which have been targeted by terrorist attacks. He also expressed support for India having a permanent seat on the U.N. Security Council.
Cameron also tried to move past a row he created when he appeared to accuse Pakistan of aiding terror groups. He said Thursday he was only speaking his mind and did not intend to damage relations with Islamabad.
"I think it's important to speak frankly and clearly about these issues. I have always done that in the past and will do so in the future," he said.
On Wednesday, Cameron said Britain wanted a strong, democratic Pakistan, "but we cannot tolerate in any sense the idea that this country is allowed to look both ways and is able, in any way, to promote the export of terror, whether to India, whether to Afghanistan or to anywhere else in the world."
Pakistan reacted angrily, saying the statement undermined the importance of its role in the fight against terrorism.
"These comments are an immature reaction from an immature politician," Wajid Shamsul Hasan, Pakistan's ambassador to Britain, told The Associated Press. "On the one hand, Cameron says he wants Pakistan to have a strong democracy that will survive and prosper, but this kind of statement is only going to fuel extremists."
While Cameron's trip to India may have appeared laden with irony, as a former colonial power sought deeper ties with its one-time colony, few here saw it that way. Powerful Indians now take it as a given that their country is a major player in the global economy.
India is "the obvious stopping place for a British prime minister whose economy is in a slack position at the moment, to try and cash in on whatever business opportunities he can get," said Kamal Mitra Chenoy, a professor of international studies at New Delhi's Jawaharlal Nehru University.
While Cameron took pains to show deference to India, there was a limit.
He appeared taken aback when he was asked in an interview Wednesday evening whether Britain would return the 106-carat Koh-i-noor diamond, which had been mined in India and was passed among Indian and central Asian rulers for centuries before being given to Queen Victoria in 1849. It is now part of the Crown Jewels in London.
"If you say yes to one (request) you suddenly find the British Museum would be empty," Cameron told NDTV. "I think I'm afraid to say, to disappoint all your viewers, I'm afraid it's going to have to stay put."
Associated Press Writer Paisley Dodds in London contributed to this report.
SEOUL/YOKOHAMA, Japan (Reuters) – Nissan Motor Co (7201.T) and Hyundai Motor Co's (005380.KS) forecast-beating quarterly profits may prove tough to match in the second half as robust sales in China and elsewhere start to slow.
A patchy recovery in the U.S. market has become one of the biggest concerns for the auto industry, especially Japanese automakers, which rely heavily on the region for its profits.
Nissan, Japan's No.3 automaker, reported its strongest quarterly operating profit in more than two years as sales surged, but it left its cautious guidance unchanged amid an increasingly murky outlook for demand.
Hyundai, the world's No.5 car maker with affiliate Kia Motors Corp (000270.KS), beat forecasts with a record quarterly profit, helped by strong sales of models such as the Sonata sedan and Santa Fe sports utility, as well as weakness in the Korean won.
South Korea's top automaker plans to launch a revamped version of its best-selling compact car Elantra in August and the Azera sedan later this year.
"The launch of new models will only have a limited effect in the short term, and we cannot see it as a solution for worsening demand," said Jung Sangjin, an asset manager at Dongbu Securities in Seoul.
Nissan, held 43 percent by France's Renault SA (RENA.PA), has outperformed the industry's growth especially in China, the world's biggest market, so far this year thanks to a model line-up more suited to local tastes.
Nissan is also aiming to boost its global market share this year with sales growth of about 8 percent to 3.8 million units, driven by the revamped Micra/March subcompact, Juke crossover, and other new models including the much-hyped Leaf electric car.
"First-quarter results for Nissan are good and our recovery is vigorous and ahead of schedule," CEO Carlos Ghosn said in a statement. "Despite uncertainty surrounding the ongoing global economic recovery, raw material costs and exchange rate volatility, we are confident to achieve our 2010/11 forecast."
Nissan shares, down about 15 percent this year, closed up 1.8 percent before the results, while shares of Hyundai fell over 2 percent at one point and closed down 0.7 percent.
Since the beginning of the year, Hyundai shares have risen about 20 percent, versus a 5 percent gain in the wider market.
"After a series of bullish earnings, market focus now is whether the second quarter might have been the peak," Oh Hyun-Seok, a market analyst at Samsung Securities in Seoul, said of Hyundai's earnings.
Under Chief Executive and Chairman Chung Mong-Koo, Hyundai was one of the rare winners in the global financial crisis, winning market share with its lineup of cheap, cleverly marketed cars and SUVs.
Both Nissan and Hyundai have done well in China, but the economy there is slowing and industry sales growth is falling. Other big markets are also struggling.
"Global car sales in the second half are seen slowing slightly from the first half due to fiscal crises in some European countries, the end of governments' incentives on new car purchases and higher interest rates," Hyundai executive Vice President Lee Won-hee told investors.
Hyundai reported a 71 percent rise in net profit to 1.39 trillion won ($1.17 billion) in the second quarter, compared with a consensus estimate of 1.1 trillion won. Quarterly operating profit was a record 863.3 billion won, beating forecasts.
Nissan confirmed it expects operating profit to grow 12 percent to 350 billion yen ($4 billion) in the year to March, lower than the consensus forecast of 401 billion yen in a survey of 22 analysts by Thomson Reuters I/B/E/S.
April-June operating profit rose to 167.9 billion yen from 11.6 billion yen a year ago and beating the average 124.7 billion yen estimated by six analysts surveyed by Reuters.
($1=1185.0 Won=87.47 Yen)
(Additional reporting by Miyoung Kim, Chyen Yee Lee and Suh Kyung-min; Editing by Lincoln Feast)