Sorry Volvo, Renault's just not that into you
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It's no secret that Volvo has had an "FOR SALE" sign posted at the front door for some time now, but the number of bidders actually interested in the company are fast diminishing. The latest company to declare its non-interest is Renault, whose CEO Carlos Ghosn claimed that they were not interested in adding another brand to the stable.
Ghosn was quoted by Automotive News as saying "Renault needs new products, new technologies. It does not need a new brand." He also said that Ford's asking price was too rich for Renault's taste, but no numbers were revealed.
Volvo has been one of the few success stories at Ford over the last decade. The company has revamped its lineup, increased sales, expanded its target audience, and most of all, is profitable now. It's no surprise that Ford is after a high price for the jewel of its Premier Auto Group.
[Source: Automotive News]
Reader Comments (Page 1 of 1)
Tryston 6:27PM (8/29/2007)
not into you ? or just can't afford it.... Volvo is solid.
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Don 12:38AM (8/30/2007)
Yeah...Ghosn's into every OTHER car manufacturer, so why not Volvo?
Unless he just wants Renault in the US again.
nagmashot 6:42AM (8/30/2007)
A company that is able to buy 44% of Nissan stocks has no problem to eat such a smale company like Volvo with only 400.000car production a year.. and by the way Volvo production numbers are dropping... pretty sure Ford wanna get rid of Volvo befor they reach read numbers..
nagmashot 6:43AM (8/30/2007)
red numbers ...sorry
Ligor 10:32AM (8/30/2007)
why would they be if they are about to introduce Infiniti world wide which can eat up some of those remaining Volvo numbers.
Ligor 10:32AM (8/30/2007)
why would they be if they are about to introduce Infiniti world wide which can eat up some of those remaining Volvo numbers.
vdk 6:44PM (8/29/2007)
Don't sell Volvo you freaking idiots!
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CH 6:48PM (8/29/2007)
"The company has revamped its lineup, increased sales, expanded its target audience, and most of all, is profitable now."
The above seems to imply that Volvo has only recently become profitable. Volvo has delivered substantial profits to Ford every year since its acquisition.
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iamhoff 6:54PM (8/29/2007)
Since Volvo seems to be the one part of PAG that has consistently worked, is profitable, is European, is respected, and is a solid source of technology, why in the hell would they want to get rid of it? Jag is a money pit, and I can see that. Aston is finally approaching profitability and has huge cachet, so I was disappointed when it was sold. Volvo is a good fit for them, and they really should hang on to it, IMO.
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B Montgomery 7:25PM (8/29/2007)
Volvo may not be the most exciting brand, (unless you're looking for something to throw the wife,family, and Golden Retriever in) but hey - it does the job.
Ford would be dumb to sell it unless they really need the money that bad.
Actually Ford, please sell it. As long as Volvo is under you, it will continue to have the cheap interiors that you have made famous. At least another company might give Volvo some freedom to spend some more dollars on their interiors...
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wally 7:30PM (8/29/2007)
Base Lincoln's off Volvo platforms!!
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Ronald 6:15PM (8/30/2007)
amen to that
JZeke 11:52AM (8/30/2007)
The upcoming Lincoln MKS sedan is based off the new S80.
Robert 8:31PM (8/29/2007)
All right. Clearly we haven't been paying attention to all the information out there about what Ford is trying to do with Volvo (and Jag/LR).
Ford doesn't want to "get rid" of Volvo. Ford wants to sell a stake in the automaker, preferrably to a PE group that is willing to turn Volvo into an independent automaker. Ford will retain a percent (20-30) just like it has in Mazda and continue sharing platforms and technology while allowing Ford to focus on Ford while sharing risks with an additional party that does not fall under Ford's financial umbrella.
The key with Volvo is that the Volvo names was one of the assets mortgaged in their round of financing. So, while Ford doesn't need cash, they do need to be able to pay off the loan tied to that asset if they sell it. Hence, the high cost (not to mention that Volvo does, in fact, deserve a nice price).
The arrangement that Ford is looking for is a very good strategy moving forward. It will help Ford simplify its operations and share risks more broadly for developing new engines/features/platforms. Ford needs to be profitable without the $400-500 million or so that Volvo brings in each year. It will also help their balance sheet by removing a liability, which could lead to better credit ratings, which leads to even lower costs, etc.
That said, Ford doesn't need to divest itself of Volvo. It would just be better from an operational perspective if it could.
Ford's got it right here, and the price they put up for Renault was always going to be too high for any automaker to justifiably cover.
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Barney 9:39PM (8/29/2007)
It makes sense to a point, Robert. Ford would still have to supply attributes to Volvo and this would have to be part of the sale discussions. Ford did not just take technology from Volvo but also contributed. An independent Volvo, would have to either surfeit Ford or Ford surfeit Volvo. Mazda was never 100% owned by Ford and the relationship is benefical to both. Jaguar has Ford drive train and it is difficult to sell without it.
Eduardo 11:32PM (8/29/2007)
Perhaps Ford shouldn't sell it, seems a wrong decision to do, so retain Volvo, try to improve Land Rover, and pass Jag away if a solution can't be found, if they found something, then keep Jag
At least Volvo builds solid cars, they couldn't be the most exciting but they are honest and fair
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Barney 12:56AM (8/30/2007)
if you are going to sell something, sell that which has value. Rover & Jaguar would have to be sold with their own drive train,otherwise the buyer would only be getting a shell. How many Ford parts would have to be substituted by the new owners? I am assuming that Volvo's have more of their own parts, made by Volvo.
whofan 4:50AM (8/30/2007)
A lot of parts in car these days are made by suppliers. Would it matter if the drive trane were supplied by Ford?
I do think that is getting to be a big chunk of the vehicle. Most companies don`t make their own axles.
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Harold Kerrick 8:57AM (8/30/2007)
If I remember correctly, Renault made a bid to buy Volvo in the '90s. That one fell through at the last moment, though I can't remember if Volvo or Renault was the one that backed out. That set the stage, so to speak, for the Ford purchase.
I agree that FoMoCo would be well ahead to sell a (minority?) share in Volvo, but not sell the whole thing unless they REALLY get desperate for cash.
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omar 9:50PM (8/30/2007)
Volvo is going to be sold at the end of the year or maybe prior too. The buyer for Volvo wil be the Swedish private equity company Investor AB, owned and runned by one of the riches Swedish families, the Wallenbergs. Volvo will become Swedish owned again, minority stake in Ford for another few years to sever ties to the FOMOCO.
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