NEW YORK -- Volvo's U.S. dealers will retain their franchises under the new ownership of China's Zhejiang Geely Holding Group.
Doug Speck, CEO of Volvo Cars of North America, said Geely has given Volvo's current management assurances that existing dealers will be retained and that dealers will not have to reapply for franchises.
"We will continue using our dealer network," Speck said during an interview at the New York auto show last week.
Geely, parent of Geely Automobile Holdings, was named by Ford as the preferred bidder for its money-losing Swedish brand in October 2009. Ford and Geely said they intend to make the deal final in the third quarter.
Volvo has 320 dealerships in the United States. It trimmed 45 dealerships in 2007, eliminating stores that were underperforming.
Speck said the average Volvo dealer in the United States had a 2.4 percent return on sales in 2009, up from 1.1 percent in 2008. Average dealership profit rose to about $500,000 in 2009, compared with $300,000 a year earlier, Speck said.
Speck would not comment on his own future as CEO, citing a mandatory quiet period on details about the $1.8 billion acquisition announced on March 28.
Speck said he was told by Li Shufu, chairman of Zhejiang Geely Holding Group, that his goal is to retain Volvo management.
Under the agreement, Geely will pay Ford $1.78 billion in cash and the remaining $200 million in a note to get full control of Volvo, including its intellectual property.