In order to gain a firm foothold after purchasing Volvo, Geely can either quickly find a shortcut to turn losses into gold, or get a steady stream of follow-up funds to support Geely's future. After a year and a half of preparation, Zhejiang Geely Holding Group (hereinafter referred to as Geely), a 13-year-old private enterprise in China, signed a final agreement with Ford Motor Company on March 28th, 21, and the stock trend of related companies was 3.34+.51.52% in Bank of China. According to Li Shufu, chairman of Geely, the acquisition of 1% equity of Volvo Cars was $1.8 billion, including $1.6 billion in cash and $2 million in checks. In addition, Geely has prepared $9 million for Volvo's follow-up operation. Accordingly, Geely has prepared about $2.7 billion for the acquisition and operation of Volvo. Li Shufu said that half of the $2.7 billion came from overseas and the other half came from China. Among the domestic funds, Geely accounts for 51%. According to Geely's internal sources, Bank of China London Branch took the lead in setting up a syndicate to provide loans for the transaction, and Geely's own investment will be between 7 million and 8 million US dollars. In addition, a provincial government financing platform will also participate in the capital contribution. However, Geely has not disclosed the specific co-sponsor and how much of the total contribution comes from loans. Previously, the co-sponsors rumored by the outside world, including Beijing Yizhuang Investment Company and Tianjin fund investment, did not show up this time. A source close to BAIC revealed that Geely originally planned to set up a factory in Beijing and sought Beijing's financial and policy support, but the top officials of the Beijing municipal government had different opinions on this matter. In the end, the opposition opinion prevailed and thought that Beijing should focus on supporting an automobile enterprise, namely BAIC. At present, Geely is seeking the participation of a company under the State-owned Assets Supervision and Administration Commission of Daqing, Heilongjiang Province. This acquisition is a dream come true for Geely, but many auto industry veterans worry that Geely will eventually be dragged down by Volvo. "The loss of hundreds of millions of dollars a year is unbearable for Geely." An auto industry insider who participated in overseas M&A of China enterprises said. Up to now, several large-scale overseas mergers and acquisitions by TCL, Lenovo and China manufacturing enterprises have almost continued the same path, that is, to raise the losses in overseas markets with the profits in the domestic market. TCL finally had to abandon its son to survive, while Lenovo is still struggling to find a way out. It is hard to imagine that Geely can make up for Volvo's huge losses with domestic market profits. According to public information, Geely's profit in 29 was about 1 billion Hong Kong dollars (about 88 million yuan), while Volvo's loss in 29 was as high as 65 million US dollars (equivalent to 4.42 billion yuan). In order to gain a firm foothold after the acquisition of Volvo, Geely can either quickly find a shortcut to turn losses into gold, or get continuous follow-up financial support. Responsible for Volvo's global operation will be Freeman Shen from Italian Fiat Group. Before joining Geely at the end of 29, Freeman Shen was the vice president of Fiat Group in China. He had 12 years of management experience in many multinational companies. Tong Zhiyuan, the project leader of Volvo China, is from Huatai Automobile. He has more than 2 years' working experience in BAIC and served as the Chinese general manager of Beijing Benz, a joint venture between BAIC and Daimler Group. In an interview with our reporter, Freeman Shen said that after Geely acquired Volvo, it would exert influence through Volvo's board of directors, but it would not directly interfere with the operation. He said that Geely will learn from Tata's experience in acquiring Jaguar and Land Rover and give Volvo's management team the right to operate independently. However, Freeman Shen has never operated a European company before. Both he and Geely are facing challenges. "Fiat itself is a European company. In addition, when I was working in Borg Warner, I had a lot of exchanges with the German branch. I'm not worried. " Freeman Shen said. What Li Shufu really hopes for is Volvo's future market and factory in China. Volvo is a tiger. Li Shufu said, "(Tiger) needs to return to nature, not be caged." Li Shufu believes that Swedish and Belgian factories are equivalent to cages, and once the tiger Volvo is released from it, it can rebuild its glory. He said that after the acquisition, China will become another domestic market for Volvo, and the China market will enhance Volvo's global competitiveness. However, Li Shufu has repeatedly promised that Geely will not close Volvo's factories in Sweden and Belgium. How to balance China factory and overseas factory in the future, and whether Volvo can develop a bigger market to absorb the expanded production capacity will be a big problem for operators. Zhang Peng, vice president of Geely Automobile, said in an interview with this reporter that Volvo just "caught a cold" and the problem was "not going up in scale". "Volvo's R&D investment may be similar to that of Mercedes-Benz and BMW." Li Shufu said at the press conference held on March 3 that once the scale is improved, the cost of amortization in each car will be reduced. However, executives who have worked in another China automobile company and have more than ten years of experience in the automobile industry believe that it is not easy for luxury cars to expand the market. "It is impossible to maintain the image of high-end cars and cater to the mass market." According to the registration information of Beijing Industrial and Commercial Bureau, Geely Group has registered and established two investment companies in Beijing Yizhuang Economic and Technological Development Zone. Among them, Beijing Geely Wanyuan International Investment Co., Ltd. has an initial registered capital of 2 million yuan and its legal representative is Tong Zhiyuan. Recently, this company has increased its capital to 7.1 billion yuan. Another Beijing Geely Kaisheng International Investment Co., Ltd. has an initial registered capital of 5 million yuan and its legal representative is Yang Jian, president of Geely Group. Recently, the company has increased its capital to 4.1 billion yuan. Observers generally believe that the rumored co-sponsor is closely related to the future Volvo factory in China. No matter who the ultimate co-sponsor is, the real supporter behind it is the local government. Geely did not disclose other funders when it announced the final agreement, which shows from one side that Geely has not yet finalized the future factory arrangements. If it weren't for Beijing, whose factory would Geely spend in China in the future?