Ford has admitted that it’s seriously considering selling Volvo as part of a drastic strategy to save cash.
“It is prudent for Ford to evaluate options for Volvo,” said Ford President Alan Mulally.
“Volvo has launched an aggressive plan to right-size its operations and improve its financial results. As we conduct this review, we are committed to making the best decision for both Ford and Volvo going forward.”
U-turn
Until now, Ford has always insisted that Volvo is an integral part of its future plans.
The Detroit giant says the review will take several months, but adds that it plans to put in measures to allow Volvo to operate on a ‘more standalone basis’.
Government funding
Blue Oval bosses will hope that talking seriously about selling the premium Swedish sub-brand will win them favour with the US Senate and potentially release billion-dollar government loans to bolster Ford’s global operations and secure its future.
“This is not a ‘fire sale’,” a Ford source revealed to Autocar. “We need to find the right buyer for Volvo.” Ford is understood to be concerned about its intellectual property and engineering getting into the hands of another company.
Stephen Odell, the managing director of Volvo, has this weekend been in further talks with the Swedish government about a separate $248 million cash injection for Volvo Cars.
GM is thought to be in similar talks with the Swedish government regarding Saab.
Swedish industry experts have been mooting the idea of nationalising both makers in an effort to safeguard jobs in the country.
New owners
Volvo Group - which sold Volvo Cars to Ford in 1999 and now makes commercial vehicles - has already distanced itself from any potential takeover deal.
“We absolutely do not want to buy Volvo Cars,” chairman Finn Johnsson told reporters.
He was critical of suggestions that the two car makers could be nationalised, saying: “The state knows nothing about the car industry.” Johnsson suggested that French brand Renault would be best placed to take over Volvo Cars.
Although its UK sales were up 23 per cent year-on-year last month, Volvo posted losses of $458 million in the third quarter of this year.
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Re: Ford: Volvo for sale
I think this highlights the issue by going up market they have reduced the number of customers. The XC90 is only common in more affluent areas.
I am in the market for a 6 or 7 seater and do not aspire to an MPV. A few yeras ago I could have selected from a Peugeot 505, a Citroen CX, a Volvo 240 or for more money an E class Mercedes. Now the one only one in the market is the E class (the Volvo S70 no longer has the option) and the XC90 almost matches it for price. My budget does not stretch that far.
Volvo might increase its sales by going back to this sector which is currently not covered but under Ford the stratergy has been lower volume higher margin. But if the customers no longer want an overpriced expensive to run SUV just to get extra seats, more space or extra cudos there is no longer a value for money Volvo option.
Re: Ford: Volvo for sale
Loads of them around my way (Beds/Bucks). Seriously think they outnumber X5s and MLs put together, although thinking about it I don't see many Merc MLs.
Still see plenty of 240s though.
Re: Ford: Volvo for sale
I don't think so, having seen Volvo 240s all over the world and over many years I believe that they must have been the most successful.
I only only ever see an XC90 when I am in London (and as product placement on television).