Cash strapped Ford has announced plans that it intends to re-evaluate their relationship with Volvo, which in non-PR speak translates into a possible sale of the brand. If the company were to sell Volvo, it would mark the end of the last remaining member of the company's once strong Premier Automotive Group which included Land Rover, Aston Martin, and Jaguar.
Given the downturn of the global economy and strong declines in sales, especially in the last three months, Ford considered the review of Volvo brand necessary. Ford's CEO, Alan Mulally, stated that "Volvo is a strong global brand with a proud heritage of safety and environmental responsibility and 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."
Volvo currently features a fresh product lineup that includes the new XC60 and recent redesigns of the XC70, V70 and S80. The company is scheduled to show a new S60 concept at the North American International Auto Show and has also announced plans to introduce seven low-emission models in 2009.
Ford stated that the review could take several months to complete and for now Volvo operations will continue as planned.
Ford Motor Company [NYSE: F] announced today it will re-evaluate strategic options for Volvo Car Corporation, including the possible sale of the Sweden-based premium automaker.
Ford said the decision to re-evaluate strategic options for Volvo comes in response to the significant decline in the global auto industry particularly in the past three months and the severe economic instability worldwide. The strategic review of Volvo is in line with a broad range of actions Ford is taking to strengthen its balance sheet and ensure it has the resources to implement its product-led transformation plan.
“Given the unprecedented external challenges facing Ford and the entire industry, it is prudent for Ford to evaluate options for Volvo as we implement our ONE Ford plan,” said Ford President and CEO Alan Mulally. “Volvo is a strong global brand with a proud heritage of safety and environmental responsibility and 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.”
Ford said the review likely will take several months to complete. In the meantime, Ford will continue working closely with Volvo as it implements its restructuring plan under CEO Stephen Odell, who was appointed to lead Volvo earlier this year.
At the same time, Ford and Volvo will continue to put in place processes that allow Volvo to operate on a more stand-alone basis in the absence of the Premier Automotive Group structure, an effort which began in November 2007 following a previous review by Ford of strategic options for Volvo.
“Outstanding safety, an increased focus on environmentally friendly vehicles and contemporary Scandinavian design will continue to be the foundation upon which we will build a strong Volvo business for the future.” Odell said. “We intend to build upon our strong brand heritage and to appeal to our global customers with vehicles like the new XC60 – the safest car Volvo has ever built. Volvo also will introduce seven low-emission models in 2009, giving us the best environmental product range in the premium segment.
“We have a strong brand presence in Europe, North America and the Asia Pacific region, and are growing in key markets such as China and Russia, where we are the leading premium brand.”
Ford Motor Company, a global automotive industry leader based in Dearborn, Michigan, United States, manufactures or distributes automobiles in 200 markets across six continents. With about 224,000 employees and about 90 plants worldwide, the company’s core and affiliated automotive brands include Ford, Lincoln, Mercury, Volvo and Mazda. The company provides financial services through Ford Motor Credit Company. For more information regarding Ford’s products, please visit www.ford.com.
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I still don't see how selling off an actual good brand is going to help them in the long run. For goodness sake get rid of mercury. The brand has no point and no products of its own, its nothing but rebadges. get rid of that crap first
It is about time. Years ago Renault was looking an opportunity to buy Volvo Cars from Volvo corp. Now they tried with no results it with Ford. May be now, Renault hence FMC have no choice!? And it is a good news after all.
I will not be surprised if an Indian or Chinese auto maker buys Volvo out. India's Mahindra and Mahindra were strong contenders for LR-Jag but Tata's bid 0.2 billion higher, plus Tata was seen as a stronger corporation by the worker unions and LR-Jag management. This time it could be M&M.
and BTW, Ford cannot sell Mercury or Lincoln for that matter because a) no one will buy them, especially Mercury and b) they are badge engineering companies, and most Ford plants manufacture all three brands. Ford also has a big investment in Mazda, which is the only profit making investment they have I believe.
Yes, Volvo is an actual car company, whereas Mercury and Lincoln are just brands on paper, or in the vapor. But so many current Fords use Volvo platforms it would seem to be the one company they bought that's actually benefited Ford.
Ford just reduced its investment in Mazda and really shares no more product now than it did before they took it on as part of the family.
Have no idea who would want Volvo, but I agree they are far more relevant than Mercury. That might be the most meaningless brand in the entire industry, and yet all they'd need to do is bring over every Ford of Europe car as a Mercury and they'd have something.
Then again, doing that with Opel hasn't saved Saturn.
I hasn't saved Saturn but has has certainly improved it. it takes time to change peoples perceptions. I wasn't suggesting selling mercury. I was suggesting killing it. Its pointless. I don't want to see the Fords in Europe become a Mercury in the States. I want to see the Ford in Europe become the Fords in the States.
Folks...one thing to remember in all of this the US Auto makers DID NOT DO THEIR HOMEWORK they all chased the pickup\SUV market with the 4.0\5.0 litre engines..on the basis of cheap oil for life!! - Ford (et al) HAS NEVER fully utilised the engineering expertise in VOLVO or LR or Jaguar for FORD USA to know how to make a good sub compact or a good Sedan. It is ONLY due to the good diligence of FORD Europe that the parent company in USA is keeping it's head above the water (Focus, Mondeo etc).
As Change is coming to America....maybe it will be the time for a European or possibly Chinese\Indian to show the boys in Detroit the type of cars that citizens of that great country need to be buying for the sake of their wallet and planet.
The American automakers did wait too long to introduce higher mileage cars...but that is over...and dont forget the American ASutomakers like any company made the product the public would buy - so really blame the american people for purchasing SUVs and large vehicles...the car companies repsonded to demand for SUVs and only $ 4 a gallon gas cause the public to shun the SUVs and large vehicles. Bersides that Ford and GM are producing products that equal the quality of Toyota & Honda now...and they offer more hybrids than Toyota and more 30+ miles per gallon cars also...
Folks...one thing to remember in all of this the US Auto makers DID NOT DO THEIR HOMEWORK they all chased the pickup\SUV market with the 4.0\5.0 litre engines..on the basis of cheap oil for life!! - Ford (et al) HAS NEVER fully utilised the engineering expertise in VOLVO or LR or Jaguar for FORD USA to know how to make a good sub compact or a good Sedan. It is ONLY due to the good diligence of FORD Europe that the parent company in USA is keeping it's head above the water (Focus, Mondeo etc).
As Change is coming to America....maybe it will be the time for a European or possibly Chinese\Indian to show the boys in Detroit the type of cars that citizens of that great country need to be buying for the sake of their wallet and planet.
hahaha you think that BMW will buy something like Volvo...I don`t think so...they won`t repeat the mistake with Rover!!! And plus that tell me what can Volvo offer BMW??? A front wheel drive lesson??? a soft suspension??? a boxy styling and worthless interior?? ohh yes you will say safety...well I tell you something...Volvo in now in safety behind BMW and all German car idustry...and Renault and others!!!Volvo wa surpassed in safety by guess who...oh yeah it`s their Swedish co-looser called SAAB which is in my opinion much better than Volvo!!! Volvo is European Oldsmobil...manufacturer with no future, nevertheless maybe some Chinese company will buy it and then you will have ?safe? and little prettier Chinese car :)
BMW is a premium brand, as Volvo, so they are direct competitors. So I don't think BMW will buy Volvo, but there are two reasons they should consider it: 1. To get part of Volvo's market share; 2. The turn Volvo into a profitable non-premium brand that would compete with brands like VW, Ford, Toyota etc.
I think Renault or a Chinese/Indian company would be favourites to buy it. Ford would retain a small equity share to help ensure supply of engines etc.
Swifthead: BMW was interested of Volvo in 2007, check your facts...Volvo could offer BMW a "family image" that BMW dont have and saftey. BMW dont know so much about safety like Volvo does.
I think you'll find Swifthead that Volvo still is a leader in safety. It may not have tailored their car's safety systems to pass the EURONCAP like other manufacturers, but is one of the safest cars you can buy. Furthermore, I think that Volvo could offer BMW a future for the Mini brand. Volvo's small cars could use the larger mini platform and engines, helping BMW lower its CO2 results. And whilst it wouldn't offer models to rival the 7 series, it could use the 4wd sytems for the 3 and 5 series platforms with lower capacity, more economical engines. It might not be the apparent 'ECObrand' that BMW is looking for, but it's not far off either. Volvo has shown given time and support, it can pull out some very good cars, like the recent XC60 and the XC90 before it. They understand that aspect of the market incredibly well, even though the saloons have been a bit lacklustre recently. I think the new S60 will be a big hit too, if the can sort out the ride.
Volvo actually made profit a few years ago before the dollar crumbled in value towards the euro. Volvo is a great premium brand with a safety record no other AUTO company can match. However Volvo has had quality problems with their cars for a longer time. An big test in Sweden of cars with the age of one year showed 3 Volvo cars among the 10 worst cars when it comes to "serious problems" (XC 70, XC 90 and V70). However it is difficult to understand Ford when they want to sell their stake in Volvo and continue making Mercury cars... If they could start producing Volvo in the USA for the US market, they would quickly see profits. They have the capacity, so what gives?
Sell Lincoln and Mercury, both are just re-badged Fords. I don't get the management at Ford Motor Co, first they blow billions on a very unsuccessful Ford GT, then they sell off the premier brands like Aston Martin and Jaguar instead of killing Mercury and Lincoln, who have no models of their own and bring in less than 20,000 vehicles sales per year
Right now it is hard to say if anyone would be interested in Volvo. Some new exciting models are in the pipeline for Volvo and that might interest BMW, but then again Volvo does not give BMW any technological advantages, but it does give BMW market segment advantage. BMW is an expensive, sports luxury brand that appeals to younger generation with money and Volvo is a not so expensive, near luxury brand that appeals to older folks with families where safety is the primary concern. Otherwise their products are head to head.
There are intersting quetions being raised here on various aspect of the topic being discussed. 1) BMW a premium brand? Yes and NO.Yes - if you base this on an historical perspective looking at their product range over the last 50 years (same for Mercedes)compared to what other auto makers were producing. However, the NO is on the basis that other auto makers have caught up on the technological front, do people know about the problems BMW have with their MMI drive; fit and finish (interior), I know of friends who have had numerous problems with the interior quality, check 3 Series(E55); Should premium not equate to TOTAL quality and service; JD Power does an annual report on dealership service in the UK market; and this has found Skoda and Lexus as two consistent providers.....or is premium solely based on price.
FORD Europe is NOW starting to produce cars (Focus, Mondeo, Kuga or S Max) of the type where quality of the prodcut is very good at a resonable price. Look at Opel\Vauxhall Insignia (COTY 2009)who would have thought that the auto maker that made VECTRA (a very inferior product) would now have a European title in 2009.
My view of all these car makers is that, customers in the future (now - especially with the credit squeeze)will only look to pay premium where you can see proper quality (Jaguar XF - the facia is now made from premium grade leather and not soft touch plastic) or where the auto box rises from the centre console, this is where you should be paying premium and not based on historical reasons.
There are intersting quetions being raised here on various aspect of the topic being discussed. 1) BMW a premium brand? Yes and NO.Yes - if you base this on an historical perspective looking at their product range over the last 50 years (same for Mercedes)compared to what other auto makers were producing. However, the NO is on the basis that other auto makers have caught up on the technological front, do people know about the problems BMW have with their MMI drive; fit and finish (interior), I know of friends who have had numerous problems with the interior quality, check 3 Series(E55); Should premium not equate to TOTAL quality and service; JD Power does an annual report on dealership service in the UK market; and this has found Skoda and Lexus as two consistent providers.....or is premium solely based on price.
FORD Europe is NOW starting to produce cars (Focus, Mondeo, Kuga or S Max) of the type where quality of the prodcut is very good at a resonable price. Look at Opel\Vauxhall Insignia (COTY 2009)who would have thought that the auto maker that made VECTRA (a very inferior product) would now have a European title in 2009.
My view of all these car makers is that, customers in the future (now - especially with the credit squeeze)will only look to pay premium where you can see proper quality (Jaguar XF - the facia is now made from premium grade leather and not soft touch plastic) or where the auto box rises from the centre console, this is where you should be paying premium and not based on historical reasons.
Good. European automakers should never merge/be bought by American car companies, look @ how Chrysler almost destroyed Mercedes-Benz. Saabs use to be such very cool cars, and then GM came along and fcuked that up by killing the hatchbacks and bringing in the... *twitches* 9-7X. As for Volvo, well they kept most of their... "coolness" but yeah, They should be bought by the Swedish, just like Aston was bought by the Brits and Merc by... well... the Germans
Wait! I thought the small Volvo's were built on Ford/Mazda platforms...so really Ford hasn't gained any technological gains from Volvo.
Infact before Ford bought Volvo, Volvo was working with Mitsubishi for their small car platform.
Volvo's are nice cars and they've always been on our shoppinglist for a family car...but it always gets dropped in favor of MB and BMW.
That's the cold hard fact...and I bet a lot of other consumers made the same choice as well.
The only way Volvo's move off the dealer here in Korea is with promotions and deep discounts (the last batch of XC70's were sold at 30% discounts.) And everyone knows that...so the used car value of a Volvo is terrifying...which detracts even more people from buying a Volvo.
Any Asian buyers of European car brand will kill it with his renomee for good. It is like China made Chopard, Patek Philippe or MG - look at it now, pathetic.
by car-o-bar...you are right...but I don't know about the trigger happy...it must be my PC! It is sad that a brand like Volvo and Saab have lost their individual identity by the mergers with US car makers. USA is a wonderful country in many ways...but I just don't get the car maker mentality over there...it seems they are "behind the curve" in all of their product planning...you don't have to be a rocket scientist to know that credit was fuelling demand and as OPEC was getting use to high oil prices...something was going to give.
As a great democracy USA is...my question to the www is ...should the politican be bailing out the car makers?.....after all is not Boeing who complained that Airbus was gaining unfair advantage with preceived handouts from European members of Airbus?
Your question is justified and US is a great country in most of the ways but they are using protectionist measures is a fact too. Just if we compare same European car model prices then we find them cheaper than in EU and e.g. Cadillac CTS from that very GM have a very fat price tag here in EU, unlike in US. Same with AirBus, that airframe is actually more advaced than competitors ones. And yet: their policy is damaging for their own economics and will be more influented by Far-East enterpreneurship culture in future in that way.
Ford US has put an offer out on Volvo so it can prove to their Government that it has assets that are worth something (unlike their pension plans). There's a reason Ford US put it's other brands to market first.
Volvo is a premium manufacturer and comments I've read about boxy styling or inferior interiors are just plain silly. Interior style is a high point of this brand and no one does a shoulder line better, nor does any other brand know their clients better. Boxy styling was a thing of their past which lead to a great product that was functional and useable. In Australia it was the no 1 for around 15 years, consecutively.
Volvo was one of the most profitable car brands in the world before Volvo Corp sold off it's cars division. I think the most profitable is Porsche (hence it's growing interest in VW).
I hope that Volvo Corp buy back their cars division and some Indian / Chinese manufacturer try their hand at using someone else's technology.
