China may be the buyer of last resort for automakers

Before you go, we thought you'd like these...
Before you go close icon

Ford (F) needs money and is almost certainly willing to sell Volvo to add cash to its balance sheet. A Chinese car company may be willing to oblige. According toThe Times, "Geely Automotive, a Chinese car manufacturer, has appointed NM Rothschild to advise on a possible bid for loss-making Volvo."

China is one of the few places with potential buyers of Western auto company assets. The central government can make capital available since China has built up a tremendous balance sheet of its own after having years of trade surpluses.

Because of the wealth of the Chinese government, it can afford to play a long-term game that other governments or private enterprises cannot. It may be willing to wait out the revival of the car markets in the US, UK, and EU and be one of the few that has enough capacity and capital to quickly meet the demand of an improving economic environment. Even if it takes two or three years, China has the time and the money.

Douglas A. McIntyre is an editor at 24/7 Wall St.

Read Full Story


S&P 500 2,341.59 -2.39 -0.10%
DJIA 20,550.98 -45.74 -0.22%
NASDAQ 5,840.37 11.64 0.20%
DAX 11,996.07 -68.20 -0.57%
NIKKEI 225 19,189.39 203.80 1.07%
HANG SENG 24,313.30 119.60 0.49%
USD (per EUR) 1.09 0.00 0.05%
USD (per CHF) 0.99 0.00 -0.04%
JPY (per USD) 110.56 -0.21 -0.19%
GBP (per USD) 1.26 0.00 0.08%

Want more news like this?

Sign up for Finance Report by AOL and get everything from business news to personal finance tips delivered directly to your inbox daily!

Subscribe to our other newsletters

Emails may offer personalized content or ads. Learn more. You may unsubscribe any time.

From Our Partners