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Report: Ford “secretly” plans summer sale of Volvo

01/18/2008, 6:23 PM

By Drew Johnson

The last remaining piece of Ford’s Premier Automotive Group could be sold to another automaker or investor as soon as this summer, according to a new report. Ford sold Aston Martin last year and is in the final stages of selling Jaguar and Land Rover. The new report indicates Ford is “determined” to sell Volvo in the very near future.

Citing senior banking sources, U.K. magazines The Business claims Ford will put Volvo up for auction in the next six months. HSBC, Goldman Sachs or Morgan Stanley could manage the deal, and several possible suitors have already been named by insiders. Apparently, Ripplewood Holdings and Cerberus — the investment firm that now owns Chrysler — are said to be interested.

In 2007, there was speculation BMW might acquire Volvo or Alfa Romeo as a front-wheel-drive partner to MINI. BMW later decided neither company would be a good match, so it’s very unlikely BMW will be a part of the bidding for Volvo, if it goes ahead this year.

The report speculates that Ford will begin the bidding for Volvo at $6 billion, $450 million short of what the Detroit automaker paid for the Swedish brand back in 1999.

Not long ago, Ford executives suggested the company planned to hold onto Volvo in the interim. While Ford has never denied plans to sell Volvo, Ford CEO Alan Mulally has indicated that the brand needs some restructuring. “Our plan now is not to sell Volvo but to improve its cost structure and brand positioning. I think we can do substantially better than where we are today,” Mulally said.

Ford has yet to comment on the new report.

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01/18, 6:25 PM

posted by:

Madcapp

That’s a fantastically shortsighted approach to Volvo. Its a good brand that could became a great brand, a la Audi, under proper management. But I’ve just answered my own question.

01/18, 6:51 PM

posted by:

Blakkarr

Management does not seem to be a problem under FORD for VOLVO. VOLVO has grown and evolved tremendously and FORD has benefited immensely because of this relationship. Until we hear some solid facts (i.e. they discuss it on national news programs), I will continue to treat as a rumor.

MAZDA is a company all by itself, FORD just happens to own a large chunk of it.

VOLVO was purchased outright and has been nothing but good for FORD. While not as exciting a AUDI, VOLVO is still a strong and highly respected brand. It would be outright foolishness to sell VOLVO.

If VOLVO could actually stand on its own and FORD was just going to have a hand on their shoulder then maybe I could go with this. But once the company is bought out it is tough to be stand-alone again.

VOLVO hasn’t been a money pit for FORD. FORD, as it is, has been a money pit for FORD. I don’t hear FORD saying they are going to sell their shares of MAZDA.

FORD never seriously capitalized on their ownership of JAGUAR and LAND ROVER. VOLVO has been a very different story. Much Like MAZDA, VOLVO has been the base on many of FORD’s newest vehicles. Indeed, aside from their F-series trucks, E-series vans, and truck based SUVs, the only cars FORD has developed in-house, from first sketch to final product, has been the Mustang and the Focus… and even the current Euro Focus is a Mazda3.

If FORD sells VOLVO,they could lose one of their best development houses. The only alternative would be to turn to FORD EUROPE who has been on a roll for the last decade or so, about as long as VOLVO. The current Mondeo is everything a mid-sized Sedan from FORD should be, The Current Euro Focus is a very marks sharper than the already formidable Mazda3. The list goes on.

FORD will need to speak out definitively or else such rumors will damage FORD’s image more than their lackluster line-up has already.

01/18, 6:59 PM

posted by:

TOZO

British tabloids. What do they know???

01/18, 7:58 PM

posted by:

F451

I’m rolling with Blakkarr on this one as he’s right on the money with his analysis. Volvo/Ford is a mutually desirable connection.

01/18, 8:07 PM

posted by:

1c3d0g

Blakkar: nothing else needs to be added, your excellent post said it all. Ford, selling Volvo would be the most stupid thing you’ve ever done. Don’t do it!

01/18, 8:28 PM

posted by:

global_lightning

Volvo is now profitable. Selling it at a slight loss makes no sense at all. This report is pure speculation; ignore it and move on.

01/18, 8:36 PM

posted by:

Veda

Rubbish rumors. Volvo is indeed an integral part of Ford since they are developing technologies that will trickle down to every Ford’s model. Just the concept doesn’t make sense.

01/18, 9:06 PM

posted by:

johnnycanuck

So if Volvo is this important how come 2 LLN articles today have barely generated a dozen posts?

It’s because it’s a boring brand- boring with a capital ‘B’! Who the heck even buys Volvos anymore? Obviously no one who posts on this site. Even on Canada’s west coast- tree hugging, upper middle class overprotective parent capital of the universe- one is hard pressed to see a Volvo carting around Buffy the spoiled princess to her soccer game.

Ford: note to marketing department- either start pushing these in Miller beer-esque Swedish bikini team hot tub ads or turn them over to someone else. You’ve already got one boring brand- it’s called FORD!

01/18, 9:13 PM

posted by:

F451

@johnnycanuck, I believe that most Volvo owners are simply not interested automotive blogs…they are too busy hugging trees, overprotecting their children, or chauffeuring their kid to the soccer game.

01/18, 11:27 PM

posted by:

gizmo2

Negative news draws attention. Ford marketing is working. Post a positive news not much happen so get a negative rumur out, look at the blog, it speaks for it self.

01/18, 11:38 PM

posted by:

LexusSoarer

If BMW was looking at adding another brand, which they are, I think it would be GREAT if they picked up Volvo. An already established and respected brand, rather than creating one from scratch. Some BMW magic with Volvo’s already decent driving dynamics (in most of their cars), would make for potentially great cars. Keep Volvo as just slightly downmarket from the BMW’s, but make them as a specialty Swedish sporty/luxy brand that’s quirky…. well, they already have that going for them, but Bavaria could only expand on that and make it even better.

01/19, 12:53 AM

posted by:

CJC

why would BMW ever need a slightly downmarket brand? If they would ever go downmarket it would be entry level. It doesn’t make sense to have two brands to overlap for a good section of their prodcut catalogue. Additionally, BMW spent years on brand equity, why start over again with Volvo which is competing in some of the same market. If BMW would expand its operations, it going to be in untapped markets. They already have mid-priced compacts with Mini, they have ultra-lux Rolls-Royce, the only market for now that I can foresee any profit is limited edition exotics to compete with the R8, 911, and Lambo.

01/19, 1:17 AM

posted by:

jdasch1

Its all a bunch of rumors…period! Fords Hybrid program relies on Volvo and several vehicle platforms are Volvo derived. Volvo’s pencil will be sharpened although with Mulally now at the helm. There is no time for waste at FoMoCo right now, and the sale of Jag and Land**** is a huge benefit for the brands that remain at Ford. Besides, who would pay 6 or more billion for Volvo??

01/19, 2:45 AM

posted by:

sharpie

I suppose BMW can step down to the VW, maybe even Skoda/Seat level, but Volvo is not a good fit for that. Mini is too “iconic” that it is pigeonholed as far as design is concerned. Lancia, Skoda or Seat would make more sense than Volvo to go down market, or BMW could have retained MG to do just that.

And Ford should keep Volvo. It is mutually beneficial so far and I don’t see the advantage for Ford to get rid of Volvo. I am going with the “rumor” side. However, there have been a lot of mismanagement on the Ford ship in recent memory. Nothing should come as a surprise.

01/19, 3:32 AM

posted by:

Veda

sharpie: Lancia, Skoda, and Seat aren’t global, Volvo is. I still think out of all the big manufacturers BMW has the best bet in managing Volvo correctly though I’m not sure which direction would be best for the brand. I wouldn’t mind if they downgrade Volvo to compete head on with Honda or Toyota. Plus if you check the IIHS site, you’ll see that BMW has lower crash test results than Volvos. Out of all the brands for sale, Volvo has the most potential in becoming something.

01/19, 1:55 PM

posted by:

MikeFX

I drive a new S80, wife drives XC90, and I blog here at least once a day. There’s the cars you lust after, and there are the cars you marry.

Not that I have to justify my purhcase, but BMWs and Mercs are way overpriced, Audis have lousy lease rates, Lexus is out since I am only 41 years old, and so that leaves Volvo and Infiniti. Last car was an FX35, wanted the M35x but knew it was going to be upgraded soon, so went with S80 as an interim car. It’s not as exciting, but it is a tremendous value.

01/19, 2:32 PM

posted by:

autonut

Hopefully Volvo will not land in India. I doubt that BMW needs Volvo. My hope is that Renault will buy it. Renault has less cache then Volvo and mutually beneficial technology and markets. Both companies developed one of the first European V6 in Europe in 70s. Nissan in the same company does not hurt either. Volvo will benefit with any European alliance except Ford of Europe.

01/19, 3:08 PM

posted by:

S-60-driver

MikeFX, u finally got a new car? A S-80?? Beautiful. What about ur screename? ha. How about “MikeS-80″? :-)

I hope to god this story is a huge rumor. If Ford sells the Volvo, they’ll be in a whole lot of mess. Gotta take everything apart, throwing away all the Volvo’s platforms/safety technologies that are sharing with current Ford/Mer/Lincoln/Mazda vehicles and SPEND MORE MONEY creating new platforms/safety of their own! Come on!

01/19, 3:17 PM

posted by:

bieltp

tabloid bristih,

When jag&lr are profitable now, send a message to ford, send Volvo nor jaguar/lr…

it’s very cinic.

01/20, 9:03 AM

posted by:

DeansterTJ

I personally love Volvos, I think they’re cool and understated, and the drive and fit/finish are excellent. The S40 is a wicked little ride (same chassis and dynamics as the Mazda3, which for me is the pinnacle of small-car performance) and the S80 is a stunner.

What Volvo needs is a slight shift in design direction and a new advertising campaign. There’s a HUGE contingent of people in the market for a 3-series or A4 who are looking for something a little more unique, and Volvo can offer that.

01/20, 10:10 AM

posted by:

autonut

it’s hard for Volvo to be unique or offer any competition to BMW & Audi in Europe. All higher end Fords have Volvo underpinnings. If consumer do look for something different then BMW & Audi stumbles on Volvo he has a choice of Volvo or higher end Ford for less money. Perhaps I have too much testosterone, but I would not spend for fancier label when I can get the same running gear for less, much less. And that why I think Ford kills Volvo.

01/20, 11:47 AM

posted by:

Veda

MikeFX: I just sold my last S40 and S80 and I miss them already. I haven’t tried the new S80 yet but it looks like one sweet ride. I’d get it over the 5 series or E Class. It just seems a more complete package at a much cheaper price tag.

01/20, 12:50 PM

posted by:

hateful83

Looks like it’s not such a “secret” anymore. It’s a shame, because I too like volvo. The older ones in particular are unstoppable. A buddy of mine has an ‘87 with about 140,000k and still going strong.

01/20, 3:35 PM

posted by:

TomF

Better Ford should sell Ford and keep Volvo and renamed themselves Volvo.

01/20, 8:07 PM

posted by:

global_lightning

Another Volvo owner here: 2004 S-60. Very nice ride, comfortable and suprisingly good fuel economy. Compared to other Euro-sedans it’s a bargain. It’s the first non-Honda or -Toyota in my driveway in a very, very long time.

 
 
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