Amidst the loss trimming, Ford revises Volvo's strategy

Ford only lost hundreds of millions during the third quarter of 2007, versus the 5-something billion they torched through for the same period in 2006. Sales and revenue are up, and while we can't see it yet, there might be a light at the end of the tunnel. Of course, it could be attached to a train, but let's focus on the positive. Ford's been eyeing the sell off of some of their PAG holdings as a way to stem their ongoing losses, and it's been speculated that Volvo could be on the chopping block. For now, though, the brand appears to be something that Ford wants to hang on to. Along with the third-quarter finances, Ford announced a new stragegy is in the works for Volvo. Mulally has pledged to improve Volvos' stature as a premium product, as well as improving their cost structure (a corporate way to say make more money on the cars by driving down costs).
Volvo's platforms and technology are spread pretty liberally throughout the rest of Ford. The Taurus/ Sable rides on a version of Volvo's P2 platform, and the Mazda 3, Euro Focus (yes, we know, " send it over here Ford, I'll buy one" - whatevs, you know you won't), and C30/S40/V50 are all on the C1 platform, while the EUCD platform which underpins the S80 and the new XC70/V70 wagons, as well as the upcoming Lincoln MKS. It would be hard for Ford to just cut the brand loose tomorrow, though reading between the lines makes it seem like they're positioning the Swedish automaker for future sale. The new plan includes improving the image of Volvo to a more premium status, distancing Ford from Volvo's operations, and fast-tracking product development. Making the division nearly an independent entity will increase its attractiveness when suitors come knocking, but it looks like Ford's biding its time for now, doing prep work to ensure a fat sale price when the eventuality occurs.

[Source: LLN]

Share This Photo X