BMW buying Volvo rumour circulates again
by John Neff on May 29th 2007 at 7:32AM 
Earlier this month, Autocar reported that BMW had expressed significant interest in buying the Volvo brand from Ford Motor Company early in 2007. The report claimed BMW had gone so far as to request financial data about the Swedish automaker.
Yesterday, the Swedish newspaper Goteborgs Posten threw another logo on this rumor's fire by reporting that sources within Ford have confirmed that BMW is exploring the possibility of purchasing Volvo. Another source has even claimed BMW and Ford have already begun informal talks.
Our previous post already touched on all the questions that need answering, including why BMW, which became the go-it-alone automaker after owning Land Rover left a bad taste in its mouth, would jump back into the ownership game. Also, while BMW and Volvo have distinct identities (the Ultimate Driving Machine versus the ultimate safety machine), there would at least be some overlap in their respective lineups.
Finally, while Ford has stated that nothing is sacred when it comes to its Premiere Automotive Group, of which Volvo is a member, why would it sell one of PAG's most promising brands? We have an answer for that one: Volvo's actually worth something. While many, including Ford itself, might hate to see Volvo leave the fold, the Swedish brand would likely catch a premium price on the market and help Ford fund its turnaround.
Would a BMW/Volvo ticket capture the consumer's heart? This armchair analyst is hardly qualified to give an answer, except to say that Volvo is a brand on the verge of some big things (C30 anyone?) and requires a patient parent company with deep enough pockets to see it through.
Thanks to everyone who sent us the tip!]
[Source: Reuters]
Reader Comments (Page 1 of 2)
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Pranav 8:06AM (5/29/2007)
Oh god, please let this be true!!! BMW and Volvo make more sense than Ross and Rachel....
I guess I could add more intelligent, witty commentary about this deal, but anyone who is a fan of either/both companies knows, this is a brilliant idea.
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Yago bal 8:14AM (5/29/2007)
Only if BMW doesn't do to Volvo what it did to Rover...
asa 9:20AM (5/29/2007)
lol! "more sense than ross and rachel"
Don 4:42PM (5/29/2007)
I think you forget one thing: Volvos share an awful lot with Fords.
The Doctor 8:06AM (5/29/2007)
BMW's not exactly a go-ot-alone company due to Mini and Rolls-Royce.
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Frank 8:07AM (5/29/2007)
This is very curious. Why would Ford sell, and why would BMW buy? I would think selling Jaguar would make more sense, although it would bring much less money. If true, this tells me Ford does not see their turn around working and have hit the panic button. From BMW's perspective this makes even less sense since these two companies compete in most segments. How would Mini fit in with Volvo?
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Eric B 8:43AM (5/29/2007)
Sorry Frank, BMW and Volvo don't compete on any level. This is why this purchase would make sense. Bimmers are for extroverts and Type-A enthusiasts; Volvos are for conservative, subtle types. The problem with Volvo right now is that they are a luxury-chic brand trying to compete with BMW. Taking that pressure off of the Volvo engineers would allow them to concentrate on getting their cars to ride well and maybe get decent engines, Yamaha V8 notwithstanding. The suspension uber-wizards at BMW can make a car do anything it wants to in terms of steering and ride/handling non-compromise, so if this transaction goes through, watch for Volvo to have nice Lexus-like rides without the fluffy cloud feeling when a corner shows up.
With how different these car brands are, BMW would have no worries about converting every Volvo platform to AWD, leaving the BMWs 100% RWD, and dropping the 3-liter twin-spin engine into the next-gen S60, knowing full well there will be near-zero sales canibalising.
No worries about Mini - niche brand that Volvo won't touch, even with the C30 (see top of first paragraph)
reak world 8:10AM (5/29/2007)
John, your statement says it all: "...and requires a patient parent company with deep enough pockets to see it through."
Ford doesn't have two spare nickels to rub together, much less enough to fund Volvo's caopital requirements.
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Shrapnel 9:51AM (5/29/2007)
Ford does not have two spare nickels? You need to learn how to read financial statements. While their profitability is in the tank, they still have a bit of capital.
geo.stewart 8:20AM (5/29/2007)
I just dont see the advantages for either side for this to work. Ford has integrated Volvo pretty well with safety sharing and such, and while it would fetch a pretty penny, I think it would be a negative to sell it at this point.
After the Aston sell, JAguar would be the next logical choice. Cerebrus should pick up Jaguar and mix that with Chrysler. Two headaches are better than one... 8^>
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JB 8:41AM (5/29/2007)
I think BMW would be very good for Volvo. A lot of Volvophiles have been very nervous that Volvo would disappear in a parts-bin montage of Ford parts - like Ford switches showing up on an Aston Martin, for example. So far, that hasn't really happened, but if Ford's tailspin continues, there will be less money for everyone and Volvo will feel the pain.
I agree with the article that Volvo is actually worth something on the market. Jaguar is a disaster and BMW was already bitten by the British car bug (Mini aside). The "English Patient" is on life support.
I think there is some overlap, but if Volvo concentrates on making safe, solid, durable cars, and BMW concentrates on the ultimate driving machine, they won't steal each other's sales. Volvo has been trying to be BMW-like a bit with the R models, but that is not where most Volvo buyers are coming from.
I own 2 Volvos, and like their robustness with good performance, and design philosophy. I like BMWs, but I am more interested in solid, decent performance at a more reasonable price - my 850 is at 200,000 miles and has been very dependable. I never have the opportunity to really exercise a BMW in my regular driving - no Autobahn over here.
All in all, BMW/Volvo would be good for both companies, and would give Ford more development cash to hopefully right the ship. It's a shame that Ford went on a spending spree with Nasser instead of plowing that cash back into Ford.
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Mattias 8:28AM (5/29/2007)
This would not make any sense: BMW uses an RWD layout with longitudally mounted engines and Volvo an FWD transversal layout. The amount of parts shared would be just to low. Years after burning lots of cash with Rover BMW would not try the same experiment again. And converting Volvos to RWD again would make them even more direct competitors to BMWs.
If someone buys Volvo, it will be Renault. Since Infiniti is a weak luxury brand, Volvo would perfectly fit the lineup and would introduce some great platforms and engines to share. And it would continue old ties: I guess you all remember the V40s and 480s with Renault engines or the Safrane with an Volvo I5...
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C. McFeeny 8:49AM (5/29/2007)
I guess it would make sense if Ford has no other choice than to sell Volvo to stay a float, but I don't think it's gotten quite that bad yet. Volvo technology is very tightly integrated across all Ford lines that it would be very difficult to move away from Volvo based platforms. If anything I'd like to see JLR (Jaguar/Land Rover) get sold off, but whatever keeps the lights on, I guess.
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Mattias 9:00AM (5/29/2007)
Eric B: That they do not compete in the US does not mean they do not compete elsewhere. Here in Europe, Audi A4 2.0 TDI, Volvo V50 2.0d, BMW 318d are direct competitors especially in the fleet car segment, as well as A6 2.7 TDI, V70 D5, BMW 520d. Here in Europe you can buy BMWs 1series with just 85kW, still fun to drive but very close to a C30 or A3...
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Simon 9:16AM (5/29/2007)
I don't see the merger being good for Volvo. Many of their cars are in competition with BMW. Volvo who prices similar cars below those of BMW's is drawing some potiential buyers from BMW. It's assame S60 is killed. Under BMW ownership I only can see more Volvo lineup being dropped. Where it'll move more into niche market to where there's less competition, ie c30. I don't see this being good to Volvo.
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Barney 9:22AM (5/29/2007)
BMW & Volvo would not have conflicting markets. There are to many shared platforms out there and it costs money to produce the same car with so many name tags. Like a Mini, people would know the Volvo is not a normal BMW.
It is a shame that Ford has to sell their assets to stay afloat.
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MikeW 9:45AM (5/29/2007)
BMW: I like inline6s and clutch pack drivetrains (BMW's xDrive) and long walks in the Black forest.
Volvo: and I also like inline6s and clutch coupled axles (Haldex) and days with 20 hours of darkness.
BMW's got their N52 & N54 and Volvo's has their B6324S & B6304T2. Sounds good
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Seminole 9:45AM (5/29/2007)
Just a thought,
People keep saying Volvo will steal sales from BMW. Well right now anyone who wants a Volvo is getting a Volvo, and people who want a BMW are buying a BMW. Except right now the profits of Volvo are going to Ford. If BMW bought Volvo, spiced things up a bit, maybe a few hundred people (nothing in terms of BMW's overall sales) will go buy Volvo's but it won't matter because in the end, all the money is going to BMW. Personally I would like this deal to happen. I've owned two S40's, a 2003 and a 2005. The 2003 was a good car but I got rear-ended and it never was the same, so I got the 2005 when it came out. Absolute rubbish. It squeaks an rattles, the radio freaks out for no reason, it's just been problem after problem. I bought it in February 2005 and in the 2+ years I've had it, I only put on 22,000 miles. In that time it's been into the shop 18 times. I can't wait to get rid of this car.
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jgp 10:01AM (5/29/2007)
Right now, Ford needs Volvo, and Volvo needs Ford.
They need each other for platform development. Volvo needs Ford's huge capital. Ford needs Volvo's profitability.
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