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Report: BMW seriously considering Volvo takeover

05/10/2007, 7:53 AM

By Nick

Earlier this year, BMW seriously mulled launching a takeover bid for Volvo, according to a new report. The German automaker went as far as requesting a complete breakdown of Volvo’s financial situation, according to the U.K.’s Autocar magazine.

It’s not known if BMW scrapped plans for the bid, or if it is still considering making an offer to Ford for the company. Given Volvo integral role at Ford in terms of safety and platforms, it’s likely Ford would expect a hefty sum for the Swedish firm.

BMW is said to be seeking a brand to pair with Mini in order to increase profitability. BMW could theoretically share front-wheel-drive platforms between small to midsize Volvo and Mini vehicles. Sources to the magazine said BMW considered acquiring Alfa Romeo –another front-wheel-drive specialist — before looking at Volvo.

The proposal is based around the idea that Mini sales of 250,000 to 270,000 cars per year is not enough for long-term profitability. A combined 500,000 Volvos and Minis built on similar underpinnings, however, would ensure profitability.

The Volvo S40, V50, C70, and C30 could all share a platform with a large five-door Mini and Mini SUV, the report said. Volvo’s larger luxury vehicles could be switched to rear-wheel-drive BMW platforms.

BMW bought the Rover brand in 1994 and was forced to sell it six years later due to massive losses. Ford, which owns Volvo, bought the Land Rover component of Rover from BMW.

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05/10, 8:03 AM

posted by:

PrimeGTP

Whoa, I didn’t see this coming! Maybe without Ford, Volvo could get some cars designed that don’t put people to sleep.

05/10, 8:18 AM

posted by:

golf4me

Good for Volvo, bad for BMW…what the hell could BMW gain from Volvo? BMW’s are at least as safe as Volvos, and Volvos are only FWD (or AWD with engine wrong-way) so what the hell are they buying besides market share?

05/10, 8:53 AM

posted by:

Wickedated

BMW would gain a HUGE pie of the European market, especially in the northern Scandinavian territories where Volvo is a huge seller. Volvo also produces heavy weight 18-wheeler trucks in Europe.

05/10, 8:57 AM

posted by:

Syrax

i’ve got stranded between the all new leftlane forums and this page…finally i can post now! on the subject: A MINI SUV? they better be kidding. all i wanna hear about is a rwd 2dr s60r!

05/10, 9:07 AM

posted by:

Bush

I don’t believe Volvo Trucks and their heavy duty equipment divisions is part of Volvo cars. I’m pretty sure Ford did NOT purchase the heavy duty equipment division. BMW would only be purchasing the “autos”.

05/10, 9:48 AM

posted by:

spud

Surely Ford need Volvo for platform sharing and economies of scale to the same degree that BMW want to buy Volvo? Then again they’re so cash-strapped maybe they’ll take the hit for short term gain.

A Mini-SUV? lol Isn’t that an oxymoron? PLEASE tell me that’s a joke! Surely that’s taking the mini cash-cow one step too far…

05/10, 10:01 AM

posted by:

jdepould

I don’t think expanding the MINI range would be a good move for the company. They have a really strong brand identity that appeals to a wide demographic, don’t f it up.

05/10, 10:08 AM

posted by:

jonnycat

I don’t think Ford will let it happen.

Golf4me- re-read it, or actually read it. It explains every question you asked.

05/10, 10:17 AM

posted by:

JSP

I think Honda would be a better fit if BMW wanted a FWD partner. It couldn’t afford to buy Honda though. It’d have to be an alliance. Both companies are engineering focused and make great engines.

05/10, 10:31 AM

posted by:

global_lightning

Link to the original article:
http://www.autocar.co.uk/News/NewsArticle/AllCars/225528/

Nothing new there that wasn’t covered in LLN’s summary. Not sure what BMW would gain other than removing a potential rival (the C30) to MINI. Isn’t the 1-Series supposed to fill the gap between the 3-series and MINI? The overlap with Volvo would cause internal competition; the brands would have to be restructured to deconfict the vehicle lines. This would probably cost more than any realized profits.
Ford would lose a lot of engineering expertise which it is applying through out its global operations. The selling price would be very high, and/or accompanied with BMW concessions for engineering capabilities. I don’t see this happening.

Oh, and Volvos aren’t boring anymore. If you have any doubts, go test-drive a turbo S40.

05/10, 11:05 AM

posted by:

A4

what happened to BMW’s pure disgust with front-wheel cars?

05/10, 11:39 AM

posted by:

Random Jerk

“what happened to BMW’s pure disgust with front-wheel cars?”

It was tossed out the window for the pure joy of profits. Don’t be so naive. BMW’s goal is not the make “the ulitmate driving machine”, but rather to seperate you from your money – just like every other business.

05/10, 12:08 PM

posted by:

Ricardo Head

If BMW couldn’t handle Rover, they can’t handle Volvo. I also think it would be silly for BMW to buy Volvo for the sole purpose of getting the Mini to be profitable. They could more readily and inexpensively do that by licensing or co-developing the Mini platform than by buying/integrating an entire behemoth like Volvo into the fold.

05/10, 12:08 PM

posted by:

A4

good point

05/10, 12:09 PM

posted by:

A4

Ricardo, Rover had crap. Volvo has a good product line that sells strong, even if they do suck ass.

05/10, 12:09 PM

posted by:

A4

not to mention the North American market – which rover didnt have.

05/10, 12:28 PM

posted by:

TomF

The problem is that Volvo, MINI and BMW have three utterly different brand personas. And each cater to a very brand-aware clientele. Platform engineering a la GM would dilute all three brands and upset all their target markets.

This isn’t like the GM buyer base, which buys Buick Rainiers not knowing or caring that they’re identical to GMC Jimmys (or whatever). MINI enthusiasts won’t like MINI SUVs OR MINIs on a Volvo C30-class platform. And a lot of Volvo fans favor Volvo as a culutural reaction against BMWs (Volvo = sensible/responsible; BMW = performance/idiot magnet).

It feels like a good way to screw up three of the world’s best automotive brands all at once.

05/10, 12:29 PM

posted by:

Hyperion

If BMW makes a car under their own marque that is FWD I will harbor pure disgust for it– oh wait! They built the New Mini Cooper, didn’t they? ;)

05/10, 12:41 PM

posted by:

MikeFX

Could all this be just a ploy to make the consumer believe that Volvo may be for sale, thereby diminishing the brand? Is BMW feeling the heat from Volvo’s new nifty lineup (aside from the new S80, which I drive, but will never compete with a 525i)? This ploy of launching a press release to weaken other brands has been happening a lot lately, and I have to imagine it works to some extent. Is Chrysler any worse off after they’ve been kicked around like a soccer ball?

05/10, 1:33 PM

posted by:

Veda

Volvo with their new lineups are getting more and more attention each year. It wouldn’t be long before they take a considerable chunk of the pie in the European brands market. BMW may not have anything to learn from Volvo (though I disgress), but they may remove a potential thorn and get some profit as well from the purchase. Ignore the fanboyism and you’ll see it as a simple reasonable business decision.

05/10, 2:33 PM

posted by:

homeboy234

PrimeGTP volvo aint that bad they theymay be a bit boring in terms of their media potrayal but they are quite modern in terms of design but the XC90 is the best volvo ever. anyway BMW should go for it and improve volvo

05/10, 2:44 PM

posted by:

Cobradreamer427

A Mini SUV?! can anyone say redundant…

05/10, 3:42 PM

posted by:

F451

I am happy Volvo is finding a good home. This can help Ford in the immediate…sorry to see Ford lose Volvo though.

05/10, 3:52 PM

posted by:

PrimeGTP

Mike, to turn around your argument, it’s also possible this could work out well for Volvo even if they decide not to sell. People might start thinking “*BMW* wanted Volvo?? There must be something there I haven’t seen..”

05/10, 4:42 PM

posted by:

illwill

Aint gonna happen, ford depends on volvo way too much.

05/10, 5:06 PM

posted by:

PrimeGTP

Agreed that it would probably be a bad business move on Ford’s part, illwill. Though then again, when was the last time Ford made a *good* business move?

05/10, 6:30 PM

posted by:

autonutt

Ford’s best business move has been to liberally borrow technology and platforms from Volvo and Mazda. I’d think the logical FWD partner for BMW/Mini would be Peugeot/Citroen since they share design and production responsibility for the “award winning” second-gen Mini engines.

05/11, 2:53 AM

posted by:

TOZO

Another ridiculous rumor!

05/11, 7:39 AM

posted by:

wetstuff

The Germans absorbed the Swedes once before with little resistance, so the Rover expirence does not compute.

05/13, 10:52 PM

posted by:

Impulsive

“Hyperion”, yes, the same company that now produces the ‘S’ which is more fuel efficient, quicker 0-60, and handles better than a GTI.

05/14, 7:52 AM

posted by:

DialM4Speed

It would be a stupid idea for Ford but who knows. I can’t really see why BMW would want it.

05/14, 2:24 PM

posted by:

angelo

MINI is not a BMW. It’s just a brand owned by BMW group.

I think this idea is great, BMW would make Volvos better (just like the Cooper S made hot hatches better by proving that there’s a profitable US market for fun and technology-filled small cars).

An S40/S60/Large Mini platform and a S80 based on a stretched 5-series and a XC90 based on a 5-series would be a heck of an improvement for Volvo.

Also, it would diminish both companies’ need for safety research (by sharing resources) and give MINI extra capacity by tapping into Volvo’s front-wheel drive components.

Realistically, Volvo has the platform for the S80 (which BMW would gladly let Ford keep) and the platform of the current S40/C30/Focus Europe could be shared by both brands until BMW replaces it around 2013 to 2015. Sounds like a great plan to me!

BMW will continue making fun rear-wheel drive cars. MINI will continue making small fun front-wheel drive cars. Volvo would make front-wheel drive vehicles with a safety/comfort focus and bigger cars with RWD and a safety/comfort theme.

Everyone wins, especially BMW and the consumer. Honestly, FORD could use any money anyways; remember that they put up all of their plants as collateral on loans, so Volvo may be worth less than you’d think (though still a bunch).

 
 
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