Forget End of Days. I reckon this is The Beginning of Speculation. The Sunday Times [UK] is pulling rank on the ranks of the autoblogosphere’s recent anonymous attribution afffliction, quoting “senior car-industry sources” for their “story” that FoMoCo is busy selling Volvo to BMW. “Sources close to Ford and BMW said yesterday that there had been preliminary talks between the two automotive giants, although that was denied by the companies. ‘No talks have taken place,’ said a BMW spokesman.” As the non-news spread through the Sunday internet, Ford felt obliged to quash the rumors. Speaking to the Associated Press, Ford spokesman Tom Hoyt said the American automaker wasn’t commenting on speculation about Volvo’s future. Later in the day, he commented, issuing a denial that the Ford was selling their cash-sucking Swedish unit. “To my knowledge, we are not in negotiations with anyone about the future of Volvo,” Hoyt almost clarified.
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Wow…
I don’t believe it really, but in case this sheer lunacy is actually based on some kind of truth, that would be an epic mistake by BMW.
It’s typically something that their current CEO would do though, since the guy isn’t a carguy in te least bit. It will probably yield him all kinds of personal benefits in the short term and who cares what happens afterwards right?
Seriously, does BMW really have to make every mistake Mercedes made 10/15 years ago for some obscure reason? First the cost cutting on design/materials for new models and now this…
Is Reithofer secretely employed by Mercedes on a mission to destroy their arch rival?
I’m annoyed now…just the thought alone…
Volvo might be cash sucking now, because Ford sucked all cash out of Volvo earlier :-). Honestly, I thought through the future of Saab and Volvo some days ago, and my conclusion is that Saab has a difficult future, but that Volvo could become a nice match for Mercedes or BMW. Both companies needs to grow volume to compete against Toyota (etc…) and could do this with success with a lover priced brand like Volvo – which used to be RWD…
This could become what the BMW-Rover/MB-Chrysler mergers never were. If any non nordic culture matches a nordic one it’s the German (including the Swiss and perhaps Austrian) (or Japanese – for example is SonyEricsson working rather good).
Good luck Volvo and BMW!
Really impressive indeed. I thought that BMW had learned a thing from the total MG Rover desaster which nearly destroyed them a decade ago, but it looks like people are forgetting fast.
The main difference between then and now is that the market situation did allow for such mistakes back then…
A BMW-owned Volvo would be awesome. I’d be all over a next-gen S40 R with the twin-turbo 3.0L I6. Okay, maybe that’s asking a bit much, but this can work.
I always thought Saab or Volvo should go to a company like Honda, which, if I’m not mistaken, doesn’t use the Acura brand in Europe. I could see Honda providing either brand with the resources and tools it needs to survive and thrive.
It’s really too bad about Volvo – if, in fact, Ford is going to sell them. I’m guessing the Blue Oval guys really don’t want to get rid of their Swedish arm – which has proven repeatedly that it still has enough engineering chops to benefit all of Ford. Jaguar and Aston Martin are one thing – but Volvo actually fit in Ford’s global plan.
I see the soft spot on here for Volvo but honestly, who would really want to buy them? I do believe that BMW buying them would indeed be a massive misstep for the company.
Volvo (at least in NA) is the same as Saab and Acura. These upper premium brands simply lack identity and cachet.
The Rover fiasco, Part 2.
Knowing Mulally’s track record, I would not be surprised if Volvo has been up for sale for quite some time. I bet that they are just keeping it all hush-hush because unlike Aston, Jaguar and Land Rover, they just simply can’t find any takers anywhere.
Sounds more believable than the GM-Chrysler cluster. BMW has MINI, and if they want to expand into FWD market, Volvo is a good choice. Provided they kill all the brand-unfaithful overlapping products (S80, for example) and basically do everything that Ford didn’t.
Sajeev:
BMW has MINI, and if they want to expand into FWD market, Volvo is a good choice.
+1. You summed up my cluttered thoughts perfectly.
However, this would take near perfect management and branding discipline. Given BMW’s tendency to water down it’s current brand, I’m skeptical.
I can’t see BMW taking on Volvo, it got it’s hands too badly burnt with Rover. A much safer route for BMW would be to launch a Triumph badged sportscar out of MINI Oxford and then gradually expand the Triumph range to incorporate FWD cars of varying types (think new Triumph 2000 and Dolomite).
The key advantage to this would be they could build factories in low wage economies. Whereas with Volvo they would be stuck with a couple of expensive plants in Belgium and Sweden.
I see some sort of synergy here with German ownership, they could take Volvo back to their roots … vehicles that looked like and were built like Panzer tanks.
Well, although I should be skeptical about this, I am actually glad that, at least, it won’t be sold to the Chinese. My only beef is that I would be much happier if the rumor was about Saab instead of Volvo as it’s in much worse shape.
I think this would be a perfect fit. Volvo could be seen as the “budget” end of the BMW family. The Volvo brand does still command a fair bit of respect, certainly a lot more than Ford does. The first thing that pops into most people’s head about Volvo is usually that they are well built, but rather plain cars. For BMW, most people think luxury and performance. This is what a merger should be, unlike the potential GM-Chrysler debacle. Both companies compliment each other, except for the S80 which is very un-Volvo.
This move would totally suck for Ford however. They’re selling off the most valuable parts of the company. Maybe it’d be more worth their while to hang on to Volvo and Mazda and sell off the Ford brand.
I third the comment about the ill-fated Rover deal. BMW never seemed to know what to do with Rover — the 75 was a highly competent FWD near-luxury car, and one that complemented, rather than competed with BMW’s other cars, but it languished.
BMW has one big marketing problem in the US: A huge fraction of luxury car buyers will not even consider BMW. This was in the car news several years ago, but I can’t find the reference right now. BMW’s image problem is the close association with arrogant master of the universe types in the minds of many people. Volvo’s buyer profile has almost no overlap with BMW’s, so adding Volvo to the corporate mix could be a way for BMW to solve a big long term problem.
The Rover example isn’t a very good one in my view. Rover was a completely screwed up company when BMW bought it, and had a partnership with Honda which blew up the minute BMW bought in.
Whether or not BMW has the correct management temperament to maximize the value of a Volvo acquisition I don’t know, but strategically the deal makes a lot of sense. Volvo’s better dealerships would also make an excellent channel through which to expand the Mini brand, and Volvo techs should have little trouble adapting to working on Minis. Speaking of which, the Mini was born of the Rover deal and was the only piece BMW held onto.
As for Ford, Mazda is much more central to what they are doing than Volvo is. The attempt to mutate the S80 platform into a Taurus replacement produced a very respectable vehicle, but it hasn’t sold well. Mazda, on the other hand, is right in the thick of things with the Fusion and Focus platforms as well as engine and transmission cooperation.
Ok…so maybe in the US there would be some chance it wouldn’t end up to be a complete disaster, but still, in Europe, a Volvo owned by BMW wouldn’t make sense at all.
In the European car market, the most important models for both companies (ie, 1/3-series on the one hand, C30/S40/V50 on the other) are direct competitors in the market. To a lesser extend, the same goes for the V70 and the cheaper versions of the 5-series. I see know way at all that BMW can increase the amount of Volvos sold without hurting their own sales and/or brand image.
They would take a competitor out of the market, but they would do so on their own expense while Audi and Mercedes will pick up a large part of the benefits.
JJ>
What if Volvo could be the slightly upmarket VW:s with RWD? That’s Volvos traditional position, and one that could be great in the future too.
Voice of Sweden>
Most BMWs sold in Europe are 4-cylinder 1 (hatchback) and 3 series…In the Netherlands, a VW Golf 2.0TDI 140HP comfortline (2nd trimlevel out of 4) goes for EUR 29.115, while a base model BMW 118d (2.0) 143HP goes for EUR 30.250. There’s not much between it as it is. You can have a base model Golf 2.0 TDI with 110HP for EUR 26.115 but even then, the price difference is not big enough to justify another model in between IMHO.
So basically I think my point stands; a lot of BMWs volume is already made up by offering a slightly upmarket VW with RWD, so there’s no space for Volvo there.
To make matters worse; a base model Volvo C30 2.0D 136HP goes for EUR 30.900. So that is even slightly more than the comparable BMW.
Look what BMW ownership brought to Mini, a rise from the dead. Granted BMW and Volvo are a lot closer in brand foot print but it’s not something that a clever product development and marketing cannot solve. As somebody already pointed out in US the the respective images are almost the exact opposites; BMWs are for selfish a**holes and Volvos for wholesome families.
The situation in Europe would be more problematic but still not unworkable in my mind. As somebody said already the ideal parent would be Honda but since Honda doesn’t seem to be able to figure this out BMWs might be good enough.
JJ> You can’t look at small non auto producing high tax European countries like the Netherlands and Denmark and claim that your prices are valid throughout Europe.
The cheapest 1-series the 116i 3-doors costs 20924 EUR in Sweden. The 118d is 23577 EUR.
The C30 1.6 petrol costs 18111 EUR and the C30 1.6D costs 20614 EUR.
So the BMW is 15% more expensive. And with both brands under the same ownership Volvos could become somewhat cheaper and the BMW:s somewhat more expensive.