Geely: Volvo Gets To Keep Intellectual Property If We Buy Company

SHANGHAI, China — Geely Holding Group, currently in talks to buy Volvo, has some reassuring words for those concerned about the Swedish carmaker's intellectual property. The Chinese automaker has emphasized that Volvo would keep intellectual property rights (IPR) if the sale goes through. The statement was issued after Geely Chairman Li Shufu spent a week visiting Sweden and other European Union countries.

The privately owned Chinese carmaker intends to acquire 100 percent of Volvo from current owner Ford. As part of the deal, Geely will be allowed to use Volvo's core IPR, including safety and environmental protection technology, the company said.

"Volvo Car will retain the ownership of core IPR technologies as well as the right to use some of Ford's IPR that it needs for business development," the statement read.

Ford, which is selling the money-losing Volvo brand to focus on its own business, named Geely as the preferred bidder for the Swedish brand in October. Earlier media reports said discussions between Geely and Ford could fail over the issue of IPR ownership and leakage.

At least one analyst in China now sees the arrangement as less than a great deal for Geely, considering that it had been touted earlier as a means to improve Geely's technology capability.

"Geely is not allowed to use the IPR on its own-brand vehicles, which makes the deal incomplete," said Xu Caihua, an auto analyst at Guodu Securities. "Geely wants to develop new products to suit the Chinese market. But it lacks capital, management expertise and necessary technologies. As a weaker Chinese company, acquiring a stronger international brand will be very difficult to [make] succeed."

The Geely group is said to be willing to pay the equivalent of about $2 billion for Volvo, which is about a third of the price paid by Ford when it bought the brand.