• Dec 4, 2008

Ford bought Volvo for $6.4 billion back in 1999. Now, a decade later, unconfirmed reports say the automaker is asking nearly the same amount -- $6 billion -- for the Swedish brand.

Ford may sell Volvo to demonstrate active steps to cut costs (a critical move as Mulally is in Washington asking Congress for financial assistance as you read this). Although it's a buyer's market, Volvo isn't exactly the hottest catch. Like everyone else, the automaker is struggling in today's market as reported sales in the third-quarter were down 24%. Volvo has cut thousands of jobs, and has even been in recent talks with the Swedish government about financial support. Potential buyers of Volvo include SAIC Motor Corp., China's largest automaker, and Hyundai Motor Co., from South Korea. Another option would be for the Swedish government to become the temporary owner until a suitable industrial buyer is found, but we think that has the same chance as the Detroit 3 being federalized.

[Source: Bloomberg]



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  • 43 Comments
      • 6 Years Ago
      I wonder where is the Wallenberg family now that owns Investor AB. That would be the most beautiful ownership there. Let Ford maintain a minority so Volvo can still develop cheaper platforms and cut costs. Then Investor AB can own the majority stake like that German family that owns the majority of BMW. Investor will ensure that Volvo use only Swedish and German parts again which will bring back much of that Volvo quality from the past with the 240 and 740. Now AB Volvo is willing to join the consortium of owners and that would be beautiful also as they can help with Volvo cars parts manurfacture again like they did before 1999. Finally Volvo needs sum rich Swedish people to own stakes in them as well to ensure no more foreign takeovers, al-la-ford.
      Volvo can do very well again if they get rid of all the Ford that they had to support. Many person dont know it but Volvo press panels for Jaguar, crash cars for Ford, JLR, and Aston. Volvo makes the seats, breaks, and electrical parts for the majority of Ford, JLR, and Aston. Volvo is stretched way to thin. Then to make it worst Volvo used to make its own powertrain in Koping and Skvode Sweden. They need to bring back their engine production to Skvode Sweden instead of England, because this new engine is not a well designed one.
      I hope Volvo doesnt become apart of the Hyundai or Chinese groupings, but the Volvo workforce have expressed a desire to be owned only by Swedish again. At the end of the day the decision will be AB Volvo, and Volvo Cars, not just Ford getting their moneys.
      • 6 Years Ago
      Does anyone remember how Korean automaker Hyundai bought Korean automaker KIA to become Hyundai-KIA Motors? I think Volvo and SAAB should do the same (become Volvo-SAAB); Volvo can be the high-scale luxury brand with an emphasis on safety and family-friendliness, while SAAB can continue to be the sporty (in-house turbos, please) and (in some people's opinions) quirky niche automaker.
      • 6 Years Ago
      Ford sold Jaguar and Land Rover for a total of 2 billion. and they asking 6 billion for Volvo..............

      Maybe it's just me, but I find that hard to believe.
      • 6 Years Ago
      Ford better have Chinese translators ready at the Volvo auction because the only buyers likely to show up at the auction are Chinese and Swedish government.
        • 6 Years Ago

        Hyundai at one point recently did express interest in Volvo and publicly declined interest in Chrysler. They might be a good fit, but BMW would be ideal. The economic conditions obviously make this situation even crazier, getting 6 Billion won't happen, but selling Volvo looks like it will. It's anybody's guess who will pick them up, I think there will be a "darkhorse" that comes out of nowhere and surprises us all by buying Volvo.
      • 6 Years Ago

      BMW might be a good fit. BMW makes RWD, luxury sedans with emphasis on sporty handling, while Volvo makes FWD, near luxury sedans with more emphasis on a cushy ride rather than sporty handling.
      • 6 Years Ago
      Actually that's a pretty deep discount a 1.89 Billion discount when you account for inflation.
      • 6 Years Ago
      I can give them 2K$ and after christmas maybe a little bit more...
        • 6 Years Ago
        LOL 2k Nice

        I think the 6 Billion figure is simply Ford's way of saying "We are not selling Volvo"..... "But we're making it look like we are"..........."And if someone steps up with 6 Billion in cash we might actually sell it to you because it be a 600% return on the value of the company in the current market".

        Basically I think they're keeping it and putting a show on... Way to heavily integrated with Ford to get rid of it... I could be wrong :)
        • 6 Years Ago
        @ Alex

        I think the conversation goes.

        Alex: I have a Volvo.
        Girl: Really??? That's bizzare. I mean. Your a man right? With man parts? So where is it? I mean I didn't think you could have both.

        I will contribute $2000 to the Consortium but I want a seat on the board. Here is my plan.

        1) Keep the partnership with Ford but get them to carry Volvo's in Ford Dealerships. No need for stand alone Volvo stores that only seem to be in select cities and half the time seem to be combined with competing brands.

        2) Reduce the price premium for Volvo's. Customer perception isn't matching the price tags.

        3) We all get the Volvo's are safe thing but do they have to look like bricks? How about taking a few chances with more funky designs. Come on you Swedes are the folks who brought us Ikea. Can't you make a car that looks more funky and interesting. The C30 was a good start. Now run with it.
        • 6 Years Ago
        i've got 250 bucks, so as of now the autoblog consortioum can take over operations at the reasonable offering of $2250.14 anyone else? theres still room for more people on the board of directors, but i want "Director of Shedding Dull Image Operations"
        • 6 Years Ago
        I'll give em 300
        • 6 Years Ago
        I was saving up for a house but... I'll throw my $15,000 into the pot.

        Me: I own Volvo.
        Her: Nice, which one?
        Me: All of them.
        Her: Do me.

        yes... that would be sweet.
        • 6 Years Ago
        excellent! I've got about 14 cents in wallet right now.... slowly but surely!
        • 6 Years Ago
        To RPM:

        Err, but Tata are using Daimler at present...

        http://www.daimlercars.com/
        • 6 Years Ago
        What a dream Alex. He says," I own Volvo." She says," My girlfriend drives a mini!"
        • 6 Years Ago
        TORONTO
        "excellent! I've got about 14 cents in wallet right now...."

        And that' about how much Volvo would be worth if you actually did but it!

        Where's your plan? How would you bring Volvo back from the grave? Could you do better than Ford?
      • 6 Years Ago
      I have to agree that Hyundai would be an interesting suitor, viable or not. They could certainly push the Volvo name into the luxury segment and compete with Jaguar, BMW, Audi, et al. Its not like Volvo isn't already a near luxury car anyway.

        • 6 Years Ago
        Hyundai's only interested in a Lexus or BMW-grade luxury brand, a brand under which they could price in $40,000~70,000 range. Volvo and Saab don't meet Hyundai's luxury brand needs. But looks like they decided to go a Lexus path after failed Jaguar bidding, that is a luxury brand of their own.

        Beside, Jeep brand is their top priority now and they would stay out of any other auction.
        • 6 Years Ago
        Hyundai need their 'new' luxury brand that have their own style and identity.

        Volvo is already old and fixed brand.
      • 6 Years Ago
      Any government involvement in Volvo Cars, be it the Swedish or Chinese would signal the end of the company.

      There is a reason these people became politicians or civil servants... they couldn't make it in the real world.

      Governments can't be trusted to hold the reigns in the automotive industry.
      • 6 Years Ago
      So? Most people's stocks aren't worth as much as they were in 1999, either.
      • 6 Years Ago
      What about BMW and Renault as a possible suitor.....for a brand like Volvo, there has to be more interest than just the largest Chinese automobile company and Hyundai. With all of the speculation it will be interesting to see how this actually unfolds.
        • 6 Years Ago
        I agree on Renault. But any of a number of other Euro car companies who would consider coming to America should be paying attention. Volvo has a solid dealer network - not too big, but sufficient to cover major markets. That's gotta be attractive on its own.

        And I don't think $6b is too much given how much they purchased it for. Volvo is in much better shape now than back then. They still have safety, but now they don't look like a bread truck (and have become more reliable as well).
        • 6 Years Ago
        Renault has some problems of its own right now and the collapse of the near luxury automobile market has put a real dent in BMW's cash position.

        BMW needs to be careful. They sell only higher end cars in a pretty narrow segment and about 125,000 motorcycles a year. The customer for those vehicles may not exist in significant numbers for a while depending on how quickly the economy recovers.

        Add to that the R&D costs for next generation powerplant technology and the cost of converting the manufacturing plants for these vehicles and $6B for Volvo could be better spent else where.
      • 6 Years Ago
      Who will bid on Volvo

      BMW : A long time suitor.
      SAIC : Nope. Will bid on GM assets instead because they understand how GM works through JVs.
      Chery : Offered $3 billion two months ago but got rejected. May make another adjusted bid again, below $3 billion.
      Hyundai : Nope. Not interested in anything other than Jeep or some other luxury brand.


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