Autoblog

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]

Ford won't say what it thinks Volvo is worth, but the Blue Oval does believe that its Swedish subsidiary is worth $2.4 billion less than it was before. Although PAG, Ford's Premier Auto Group comprised of Jaguar, Land Rover and Volvo, increased its year-over-year revenue and pre-tax profit in 2007, Volvo once again posted a pre-tax loss for the year. In addition, with Ford's sales outlook for Volvo having been a bit optimistic, the brand's car production will be cut this year by 23,000 units. These are the reasons that Ford cites for the writedown, in addition to "an adverse model mix", i.e. vehicles that consumers don't seem to be interested in buying. Ford, however, says that this is not the first step in a Volvo sale and that it won't start building Volvos in America to counter the crappy exchange rates that jacks up prices.

Ford has largely kept Volvo out of the PAG fire sale discussion. Aston Martin found a new home just after it made a profit for the first time in years, and PAG's improved numbers last year were due solely to the barnbusting business being done over at Land Rover, which was good enough to put both Land Rover and Jaguar's combined business in the black. Ford has a lot of chickens closer to home that it's worrying about right now, but one wonders when it will publicly commit to doing right by Volvo (development-wise and model-wise) or commit to selling it.

[Source: Automotive News, sub. req'd]

Earlier this month we brought you a rumor that BMW was in talks with Ford to buy Volvo. Then just this week the rumor popped up again, in a Swedish newspaper. Now Ford comes out to officially quash the story, saying, "Ford Motor Company is not in discussions with BMW or any other company regarding an interest in the Volvo Car Corporation."

That should take care of it, right? Well, not with everyone. Reuters quotes several industry analysts saying such a sell wouldn't surprise them. Ford could make a load of much-needed money by getting rid of Volvo, and one analyst said he would expect Ford to look at all serious offers.

A Merrill Lynch analyst told Reuters Ford might get as much as $8 billion for Volvo, if, of course, it were for sale.

We've already stated our thoughts on BMW buying Volvo, but with the sale of Chrysler to a private equity group, could Volvo be the next Cerberus target? A Chrysler/Volvo team could be the halo marque the automaker needs, and Chrysler could also benefit from Volvo's safety first image.

Such a matchup might also mean a Magnum-based Volvo wagon. Interesting.

Thanks for the tip, SobeSVT!

[Source: Reuters via Yahoo]

Autocar says BMW seriously considered taking Volvo off of Ford's hands earlier this year, going so far as to request financial data about the company, which is surprising on several levels.

First, does this mean Volvo is for sale? Bill Ford has said nothing in Ford's Premium Auto Group is sacred, but Volvo seems to be one of the company's shiniest jewels.

Perhaps the greatest surprise would be BMW's Quandt family overcoming its aversion to buying another carmaker after the much maligned purchase of Rover. Despite ending up with the popular MINI brand, it's well known that the Quandts were not happy with the whole mess.

Speaking of the MINI brand, Autocar theorizes that had BMW written a check for Volvo, future small cars from the Swedish automaker might have been based on a platform shared with an expanded MINI lineup. Autocar daydreams that by sharing with Volvo, MINI might have expanded its lineup with a sedan and that rumored SUV variant, the Colorado. On the other hand, larger, more upscale Volvos could have been BMW-based.

Which leads us to another quandary in this rumored buyout deal. How would BMW have positioned Volvo's quite similar lineup against its own? Both have a full selection of premium coupes, sedans, wagons and SUVs targeted at upper income buyers. Granted, Volvo touts safety while BMW espouses to be the "Ultimate Driving Machine," but wouldn't sales of the V50 have competed with the 3-Series wagon? The V70 with the 5-Series?

Upside? Well, Ford would have gotten another short-term financial boost and BMW would have had the potential to save money with platform sharing.

What does the Autoblog community think? Opportunity missed or disaster averted?

Thanks for the tip, Brent!

[Source: Autocar]