Ford indicates it plans to sell luxury marque
1 December 2008

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.

Will Powell

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Comments
20

1 December 2008

I have been reading with interest all the corporate-speak and spin Ford have been spewing out over Volvo in the past few months....first "Volvo has a Swedish-guy at the head and thats how it should be" before they summararily dismiss and replace him ... then "read my lips, Volvo is not for sale" ... just before this.

It is sad that a company that has been able to produce cars with integrity in Europe (but not in the 'states - anyone seen the "new" focus there? Poor customers....) has such a lack of commercial and corporate integrity or consistency in the way they manage their business.


1 December 2008

I think it has been on the cards, Ford did not ever count Volvo car sales or Mazda car sales in its sold car figures; it sticks in my head it might have counted JLR though (?)

Anyway, like with Mazda and JLR, Volvo use many of the same bits and thus for Ford will keep selling compoenents to Volvo regardless; Ford share price should improve.

Volvo does not make money, look at Ford strategy used at JLR i.e. deny, then build a new car with some others in the pipeline then sell; on this site it says "considering sale" and on the Car Magazine website it says "up for sale";?

I read in Sweden support is present for joining Saab and Volvo and nationalising them which might be quite good; that Saab turbo (from years ago with the three spoke alloys) was mighty cool!

NB; Steve Steele, if you genuinely want me to justifiy why I think a car is not like a Choc bar (!!) (I cannot believe I have just written that as it clearly is not!) then I will do that as I said I would; but this week for me is flat out (time wise) and it will involve marketing aspects etc; thus I can drop the odd thing into blogs etc unless you can open seperate forums? but you have to be genuinely interested, if you are going to mess about, life is to short and I would not be bothered.

1 December 2008

If world wide nobody wants to buy a car, what makes Ford think anybody has the money to buy a car manufacturer. ? If I remember a fact correctly from a few years ago, Volvos had more British manufactured parts in them than most Brit built cars. So for our parts manufacturers sake lets hope Volvo finds a strong and commited new owner, with a sense of individuality .

1 December 2008

[quote North]I read in Sweden support is present for joining Saab and Volvo and nationalising them which might be quite good; [/quote]

I think that would be wonderful; a true Swedish car (with full common-sense and practical characteristics) on the market once more. It might even work: I think the tide has turned and the days of the fashion for cars that are trying to be something that they patently are not (or trying to portray their owners as something that they are not) might be over.

A bucketful of Swedish cold water thrown over the motor industry might even help straighten it out and bring it down to earth.

...the band was playing Dixie: double-four time...

1 December 2008

[quote North]I read in Sweden support is present for joining Saab and Volvo and nationalising them which might be quite good; [/quote]

I think that would be wonderful; a true Swedish car (with full common-sense and practical characteristics) on the market once more. It might even work: I think the tide has turned and the days of the fashion for cars that are trying to be something that they patently are not (or trying to portray their owners as something that they are not) might be over.

A bucketful of Swedish cold water thrown over the motor industry might even help straighten it out and bring it down to earth.

...the band was playing Dixie: double-four time...

1 December 2008

What I used to like about the car industry was how a car reflected where it was designed and built. You know, swedish cars were quirky but good. French cars had flair and great ride. German cars were and still are solid, worthy but a touch dull.

The globalisation of the car industry has been both the saviour of much of it and now in this era of every car being the same as 10 others also its downfall. What is the point of a Volvo XC60 when you can get the same car cheaper with a Land Rover badge or a cheaper better Mazda with a Ford badge (or in the case of the Volvo C30 much much more expensive!).

If 1 good thing will come out of this recession....it will be the return of independant car makers.....once the despair and destruction clears.

1 December 2008

[quote Cheltenhamshire]If 1 good thing will come out of this recession....it will be the return of independant car makers.....once the despair and destruction clears.[/quote]

Not so sure myself we'll see the return of independent makers.

This releasing of once subsumed brands is merely the need of Ford and GM to quickly realise cash to save themselves. If the auto industry was to follow the sector that has caused this worldwide slump, banking, then we would see real bankruptcies, some liquidations and more takeovers.

My guess is the American big three will become one de facto nationalised champion within 18 months, much like BL in the 70s. Opel with Saab may exist temporarily independently but will be taken over by one of the German marques within two years, Ford of Europe similarly. The Germans, VW, BMW, Daimler, will just survive although with around 30% less production capacity within a few years hence. The Japanese are due a shake-out due to their over-reliance on North America, Toyota to survive, the rest almost impossible to say. The French, somewhat like American big three, although better placed due to sales spread on many continents. Again could see one national champion entity here within two years.

The only way to really bring about a rebirth of national car companies is protectionism, with say the Swedes making it prohibitive to import any cars against home produced Volvos and Saabs. There's a small chance this may happen too.

1 December 2008

[quote horseandcart]Not so sure myself we'll see the return of independent makers.[/quote]

Unfortunately, you are probably correct....

Anyway, just as long as Bristol are still around when I retire - so that I can be a proper grumpy old git in a proper motor car. (And probalby only drive it 2000 kms a year due to emission and fuel considerations.)

...the band was playing Dixie: double-four time...

1 December 2008

emissions will probably be band no miles at all by then!!..kids will grow up not ever hearing the sound of a V8; but maybe they will let a Spitfire fly so they could at least hear a Merlin V12 engine as it flies past (bliss!)

from horseandcart, I agree, I can see the french getting together (but I think Renualt would fall out with the others after a year or two), I still think BMW are so ropey; I think they are real touch and go and I could see merger (there was talk of Fiat i.e. beyond the tie up with a city car?) or how about BMW just being a maker of engines to supply others? (BMW and Honda merging?).....Damiler okay, I think Saab/Volvo would be awesome together, I think you are so right about the japanese......Toyota got greedy as you say in the US.....survive, Honda does have the bikes and marine engines......maybe a break up of Honda between cars and bikes (Honda did get something going with GE on the Honda plane...I cannot remember if it was on aeroengines or it was just joint on the plane)..for Honda, its diversification is a bonus for it......Nissan is a funny one....for the US, not sure, I think Ford will survive (with Ford EU...I think Ford will eventually bring Linclon to the EU.(not for a while though!)..the Toyota marketing guy switched to Ford earlier this year...) , GM and Chrysler I think.....or maybe Chrysler will just break up..you have Jeep; Ford and GM have cultural differences...Sloan v. Ford - maybe GM and Chrysler minus Jeep and Hummer (they would package together well and sell to the Russians or Chinese?)......

1 December 2008

as a second thought....the talk about Nissan, Chrysler and Renualt....you would have a spread across three continents (it woudl balance well)......you could maybe get Mitsubishi joining in or how about Subaru and Mitsi? Mitsi and Honda? Subaru/BMW? that would leave GM the odd one out but it has the Chevy Volt?.....

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