Struggling Swedish car maker not for sale, but the Blue Oval wants more influence

Despite increasing rumours, Volvo is not for sale, according to senior Ford sources.

Instead the company has decided to turn around the fortunes of its loss-making Swedish subsidiary, rather than allow it to be sold to a Russian or Chinese bidder. Ford’s senior management wants to boost Volvo’s annual sales from 420,000 to well over 600,000 units.

Ford is said to be unimpressed that Volvo has stumbled with a product strategy, which has seen sales of most of its models falling in recent months.

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One source suggested that Volvo was too small to properly compete with premium makers such as BMW and Mercedes and it would be better to play to its traditional strengths by competing with ‘premium mainstream’ brands such as VW.

Insiders say that Volvo’s future model plans will be completely re-worked. A whole new forward strategy – with plans for less expensive models that sell in larger volumes – could be rubber-stamped as early as the new year.

In future, Ford strategists are likely to insist that Volvo’s future models are more closely aligned with Ford products. Volvo’s decision to engineer the XC60 SUV solo, rather than work with Land Rover or Ford, is said to have resulted in an expensive project that was slow to arrive in the showrooms.

Another internal criticism of Volvo is that it failed to catch the ‘green’ wave and establish itself as a leader in environmentally friendly technology.

Volvo is also accused of making slow progress on hybrid technology, despite being one of Ford’s centres for hybrid development.

Ford has been strongly rumoured to be open to offers for the troubled carmaker. Chinese manufacturer Chery – along with outside investors – have been tipped in the Chinese press as front-runners to buy Volvo.

However, sources say that Ford is unwilling to allow Volvo and Ford’s advanced technology to be sold off to carmakers in emerging markets.

Ford is struggling with its own huge losses and project to switch from SUVs to building smaller cars, making Volvo’s problems an unwelcome distraction.

The cover of a recent Swedish business magazine portrayed Volvo as an XC90 sitting on bricks under the headline ‘Tired Giant’.

Workers at the Torslanda factory near Gothenburg were recently quoted in the industry press as wanting Ford to sell Volvo to a new owner.

Hilton Holloway

 

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13 August 2008

Is this not just part of Ford's hope to sell European models in the USA as Americans desert their SUVs?

Volvo have always had a small following in the USA and it might be expanded so Ford can surely make a case for not selling it off yet.

13 August 2008

Volvo's attempt to appear 'cool' is frankly embarrassing! Ads showing groovy young people in an estate car (V70?) or the 'controversial C30 against a graffiti-covered wall... Even painting the XC70 bright red looks wrong. Difficult to see a niche for the brand any more, especially as complex 4x4s are no longer required. Perhaps a couple of Ford-based saloons/estates + a stunning P1800 update??

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