Volvo Cars' share price has plummeted by up to 75 percent over the past three years, and now Geely, which owns a majority stake in the brand, is reportedly looking to sell part of its share.
According to information from Sveriges Radio, Geely holds 78 percent of the shares in Volvo Cars. Now, they are considering selling a larger portion of the Swedish car manufacturer.
The Chinese automotive group acquired Volvo from Ford in 2008, gaining control of the brand. But its high ownership stake may have deterred stock market interest, and the potential sale follows a substantial decline in Volvo’s share price.
Volvo Cars' share price has dropped by 75 percent in the last three years, including a 27 percent decrease this year alone, despite Volvo’s gains in market share.
Market analysts suggest that Geely's ownership may be discouraging other investors, negatively impacting the share value.
“Something must be done,” an unnamed source told Sveriges Radio.
Additionally, there is concern that Volvo’s close ties with China could pose a risk to sales, particularly in the U.S. President Joe Biden has proposed legislation that could effectively ban Chinese cars in the U.S. as early as 2028.
If Geely decides to sell its stake in Volvo now, it would be at a time when the car brand’s value is near its lowest level in recent history. The current share price reflects a market value of around 72 billion Swedish kronor, approximately 6.6 billion US dollars.
Geely has declined to comment on the information reported by Sveriges Radio.
