Ford has strenuously denied it is considering selling Volvo Cars, despite the Swedish carmaker running into financial trouble.
Volvo has posted a loss of $151m in the first quarter of 2008, compared with a $94m profit in the same quarter last year. Sources claim that Volvo could be poised to make significant job cuts to help to turn the financial situation around. Lewis Booth, chairman of Ford Europe, said “Volvo is not for sale and we are about improving the business”. Volvo is also under pressure from the strength of Swedish Krona against the US Dollar, which makes it very difficult to profit from export sales to the US.
Volvo sources told Autocar that sales of the new V70 estate car – the company’s bedrock model – had started to slide, despite the model being less than a year old.Swedish Volvo dealers are said to have complained that the V70’s design was not distinctive enough and that the new model was not a significant step forward over the previous V70.
At a recent meeting of industrialists in Sweden, Volvo was also criticised by a brand specialist who questioned Volvo’s model strategy. The specialist suggested that a “family-orientated company” had made a mistake having three different saloon models in its line-up, and for investing in the compact, three-door C30 sports hatch. He also questioned Volvo’s lack of a large, stylish MPV.
Ford is also under public pressure form new investors. The Tracinda Group, an aggressive investment corporation led by Kirk Kerkorian has recently made a cash offer for 20 million Ford shares and a spokesman told the press that Ford should “sell Volvo and the US Mercury brand”.
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Re: Is Volvo in crisis?
Hi there, first post from a long term Volvo owner. I'm on my sixth right now and am wondering if it will be my last. Many years ago the motoring media used to make much of the trilby hat image of the typical Volvo driver and marvel at the fact Volvo had by far the best repeat custom figures of any manufacturer. Back in those days, the 240s were superb tools, unpretentious, well made and not in any way aligned with aspiration or ego. So it was for many years. If I were of the previous generation, I would probably be one of those trilby hat wearers. So, it was with some alarm that I started to read some of the things Steve Mattin was saying about the new generation Volvos. Words that would never have been used by Peter Horbury, let alone Volvo's founding fathers. Volvo is not about style or image, or lifestyle. Its about integrity. Thats what its customer base wants. By all means Ford can go chasing the gelled hair generation, but I'll tell you what will happen. They won't bite, and in the process, you will alienate your core customer base. If I wanted a Ford, I would buy a Ford. Ford have ruined a business. To a certain extent I sympathise with Ford. The P2-X cars, the S60, last V70, XC90 etc, were superb. The business was very attractive for them to acquire.
So, what have Ford done for Volvo, to move the game on? Well they swiped Peter Horbury, and now Focus and Mondeo have his inspired Volvo DNA splashed all over them.
The excellent 5 cylinder engine is now called 'Duratec' and apparently I now have 'the engine from a Focus ST'
The new Ford era Volvos share floorpans and engines with mid range Fords. The 'styling' is losing direction. XC60? New V70? No thanks. These cars are losing their integrity. And that is what keeps repeat business rolling for Volvo. Not an inside that looks like an Ikea showroom, or a few deft flicks on the flank, Swedishness with all the Ford logos kept hidden behind the touch points.
Volvo's P2 range were justifiably popular. Expecially the V70. A true Volvo, and maybe the last one. I fear that Volvo has been assimilated in the same way as Saab has been by GM. These cars are not brands, the people who buy them wear the logos on the inside of their clothes. If you try to cynically brand engineer something of integrity, you are doomed to fail. Or maybe I'm wrong. Maybe I'm just an inconvenient remant of a place Ford no longer wishes to be. I hope they do sell.
Re: Is Volvo in crisis?
The Volvo range is a little confused, particularly at the upper end of the market. The S80 is too large, the V70 and S60 don't match and the SC90 should be ditched in favour of the XC60.
The C30 is a great car - not oversized, great engines, comfortable and good value. The Focus doesn't have the premium feel or comfort chassis. The Mondeo is now massive and now the size of a Granada/Scorpio.
I am in the market for a 3 door on a company car scheme. The Volvo C30 offers the best compromise for me. It's not common (focus, 1 series, A3). It's very comfortable (my preference) and practical enough for me.
It's innovative and stylish, not over priced like the A3 and 1 series or claustrophobic and too harsh like the Focus.
Volvo does need to address the upper echelons of their model range and make sure they concentrate on being a premium safe manufacturer that plugs the gaps in other brands' ranges.
Re: Is Volvo in crisis?
Funny how some people are saying the V50 competes with different cars. To me it's in the same class as the estate versions of Astra, Focus, Megane, Merc C, BMW 3, Audi A4, Alfa 159, Saab 9-3. At least they're all broadly similar in size (width and capacity). OK, I know some are premium, and offer better quality, but is the extra expense worth it?
Last year when I was looking for a family estate, I didn't even look at the V50 since the boot is smaller than the others (417/1307 litres compared to 520/1600 of the Megane). Sure the 1.6D is a decent enough engine (Pug/BMW/Ford), but why not get something as good or better (depending on what you need/want) for less money...