Volvo's suitor of the week: China's Chery
Following up on our report last month about Volvo possibly going to the Chinese, state media is now reporting that Chery Automobile, one of the largest independent and fastest growing Chinese auto manufacturers, has its eyes on the Swedish automaker. Although officials at Chery rule out the possibility of buying Volvo, other sources have stated that the Chinese automaker has already negotiated funding for a possible acquisition. If so, that funding will be significant-insiders put Volvo's value at 30 billion yuan (about $4.4 billion dollars). This isn't the first time that Ford has been rumored to be cashing-out on Volvo... however, it was just two months ago that Ford officials reiterated that Volvo was not for sale. We wouldn't bet our yuan on it.
[Source: Automotive News, subs. req'd]
Reader Comments (Page 1 of 2)
Jvijil 9:10AM (7/08/2008)
chery really....i was expecting tata maybe taking a wack at volvo this is unexpected lol
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Avinash machado 10:09AM (7/08/2008)
Hope BMW or Renault will buy it instead. Or perhaps some Swedish consortium might want to buy it.
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finnman 12:29PM (7/12/2008)
just wondering...if renault buys them, isn't that like saying that nissan is buying volvo
Everett 10:12AM (7/08/2008)
This would be the best idea a chinese manufacturer has had...what better way to reverse engineer the safety standards required in the rest of the world than with a world leader in occupant safety? This could move-up their north american aspirations by ten years.
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I_Hate_China 10:51AM (7/08/2008)
Chery has no cash to buy Volvo. Heck, Chery has no money to pay for its own expansion in China, and is forced to enter foreign joint ventures to raise cash needed for new plants.
Assuming Chery buys Volvo for $6 billion(Ford won't sell for less than this) with burrowed money, then Chery has to pay $500 million in annual interest. Something Chery cannot do.
inteller 11:07AM (7/08/2008)
and move Volvo's reputation for safety back 100 years.
Pacman 10:21AM (7/08/2008)
Noooooo, well I guess I will never own another Volvo unless I buy one soon.
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Paul 10:23AM (7/08/2008)
not gonna happen.
Volvo AB
Renault
or maaaaaybbbbbbeeeeeeeeee BMW
Those are the only places it will go.
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I_Hate_China 10:46AM (7/08/2008)
Ford is asking for $6 billion, $1.7 billion more than Chery's offer. Unlike Jaguar and Aston Martin, Ford does need Volvo and won't get rid of it cheaply.
Volvo won't go to Chery.
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jamie 11:03AM (7/08/2008)
One thing for sure, if Ford does find a buyer for Volvo, you can bet your bottom dollar that Ford will retain at least 33% equity in the deal.
Ford cannot scrap all the investment it has put into Volvo. Its platforms depend on them. And the safety issue is worth its weight in gold.
But it does make sense to let someone else with more capital take hold of the reins for a while to help build the brand more so. Ford has to spend more time on rebuilding its own core portfolio: Lincoln-Mercury-Ford in the near term anyway.
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Richard S. 12:24PM (7/08/2008)
Maybe SAIC can buy Volvo. They came up with the Roewe brand after getting shut-off from acquiring the Rover brand. The Roewe is not bad looking, but as a brand has not credibility.
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I_Hate_China 12:35PM (7/08/2008)
> Maybe SAIC can buy Volvo.
$6 billion is too rich for SAIC either.
I don't think Volvo will go to Chinese, especially when Renault and BMW lined up as interested parties.
Chrysler/Dodge/Jeep is another matter. When Cerberus sells Chrysler, it will split up the brand and sell them for $2.5~3 billion each to maximize their return. Chinese will have a shot at Chrysler, the least valuable of three brands.
AntBee 1:58PM (7/08/2008)
Someone needs to come down on one side or the other, is it for sale or isn't it? I am sick and tired of this appearing almost weekly here on AB! If it is for sale, God forbid it would go to the Chinese! I hope the Swedish people are able to take it back or at least a well-established company like BMW or Renault.
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phil 2:28PM (7/08/2008)
Even though Volvo looks like a money-loser, it really is the only reason why Ford hasn't gone under yet. Look at the Euro Focus. It is sold around the world underpinned by a Volvo-Ford-Mazda chassis. Best selling car for Ford by far around the world. The Mondeo rides on a Volvo chassis as well. The Taurus that we all love so much rides on the old S80 platform. The 5-cyl engines that Europe gets are Volvo engines. There is no way to detangle Ford and Volvo's profits (and losses). Volvo is worth more to Ford in the fold than outside.
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Father Richard Byrne S.J. 9:12AM (7/12/2008)
My first Volvo had a window shade in front of the radiator with a pull chain into the dash. Yeah, that is a great thermostat.
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David 9:31AM (7/12/2008)
Oh, for cryin' out loud! We have GOT to put a stop to this "global economy" nonsense! Globalism is all about money and power, and these greedy monsters don't care whom they have to kill to get it. The love of money is the root of all evil.
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Antgne 11:08AM (7/12/2008)
I'm not liking this at all. I might have to get rid of my Volvo C70 and I just purchased in no more than a month ago. It wasn't brand new, but it was sweet.
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Not complacent 12:22PM (7/12/2008)
A O L stands for Aryans-On-Line. The writers and editors of the website frequently love to make article titles that are racist, stir up controversy as well as bring out the RACIST in everybody!!!
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Darin 1:44PM (7/12/2008)
Don't like them China is a paper tiger and nothing backs there money, they won't tell anyone the whole world whats backs there money and the US debe to them does cover the billions and billions they print to take of global markets based on lies and what they tell you about there power Big paper Tiger.. Dont sell your not getting anything but bad debt
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Rick 4:17PM (7/12/2008)
I have a 98 c70 with over 200,000 miles on it, runs like a champ STILL..and I would really hate to see volvo sold. They saved ford in a time of crisis...true quiet heritage there...
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