The autoblogosphere is alight: Geely has informed FoMoCo they’re no longer interested in buying Volvo. Turns out that a previous statement that Geely wanted to aquire 100 percent of Volvo PV was a solo play from a CEO of one of Geely Groups’ subsidiary companies, not Geely as a whole. Or was it? The Swedish punditocracy is viewing this one a tactical play from Geely to lower the price, in a “typically Chinese” fashion. Meanwhile, Ford’s adamant that Volvo is getting the old heave-ho. According to di.se, Fords’ Chief Financial Officer said “Die! Volvo! Die!” Skämt. In fact, Lewis Booth said . . .
Keeping Volvo is not an option. “We are in the midst of a prossess, and are still talking to interested parties,” he assured in a not-so-assuring sort of way. “It’s not about Volvo, it’s about keeping focus on Ford’s challenges.”
Just in case that wasn’t enough to drive the asking price into the takränna: “We need to gather our personell and financial resources around Ford, that’s why we’ll continue the process on a Volvo sale.”
Note to Ford: Har man inte det ena, får man ta något annat, antingen sämre eller bättre. For the lack one thing, take another, whether better or worse.
Watch the Russell Peters skit on how Indians can’t live without a bargain and the Chinese can’t give you a bargain. Suddenly, this play from Geely makes much more sense….
Ford is right to press on in selling Volvo, but will Mr Mullaly kill the idea of having a global luxury brand? I think for a healthy global organisation, it would help to have such a brand. Maybe they could take Lincoln global? Not entirely sure whether the Germans will be shaking in fear, though…..
Volvo is not a luxury brand. Volvo has never been a luxury brand. Volvo is a family car brand which can command a modest price premium over mass market brands.
Mr Horner,
I agree with you. But Ford played it like that, so Ford should work with that. Unless what they’re trying to say is “We screwed up, can someone help us out of this pickle”….?
KatiePuckrik : Watch the Russell Peters skit on how Indians can’t live without a bargain and the Chinese can’t give you a bargain. Suddenly, this play from Geely makes much more sense….
Ford is right to press on in selling Volvo, but will Mr Mullaly kill the idea of having a global luxury brand?
They killed the idea when they tossed Jaguar to the Indians…who weren’t exactly in bargain hunting mode back then. :)
Right now, Ford doesn’t have the time or money for a global luxury brand, and Volvo was never the right move for that game anyway. A reincarnated Lincoln brand full of American swagger (in 10+ years) has a better chance than Volvo ever will.
I’m sure those Swedes are authorities on what is and what is not “typically Chinese” fashion :) You really do hear the weirdest stuff these days.
I agree with Sajeev; if Ford wants a luxury brand, they need it to be a homegrown one. With qualities people associate with where Ford comes from. How anyone can come up with the idea of having their “luxury” brand’s cars conceived, engineered and built in a country where people pride themselves on being too sensible to spring for unnecessary luxuries, is beyond me.
Ford needed to sell Volvo for the money. Now it needs to sell it for their public image of returning to the right track. This includes saying things like “We need to gather our personell and financial resources around Ford, that’s why we’ll continue the process on a Volvo sale.” but that doesn’t mean they want to sell it for a bad price.
John Horner,
Volvo is actually a luxury brand, you may not like it, but it is. The 700, 800 and 900 series were the cars that first brought Volvo to the near-luxury table. If you look at the current lineup the V70, S80, XC60, XC70, S40, V50, C70 and C30 compare quite well to the competition’s mainstay models. The XC90 and S60 are getting a bit old but will be replaced shortly. If you are comparing feature for feature Volvo’s will be right there. If you are comparing power, yes the Volvo lineup is lacking, but you have to remember that not everyone buys an E63 or an M5, most people but the base and mid range engines and to them Volvo’s silky smooth T6 enigne compared very well. The ultimate test is the country club test. If you go to the country club in your Volvo,it won’t be out of place, it won’t be as flashy as a Jag, BMW or Merc, but it’s a sensible near luxury option. A Volvo would be much more at home in that situation than a Chevy, Ford, Chrysler or even most VWs.
We may not agree with it, but at the moment Volvo is a luxury/near luxury brand. If you consider the Brand’s reputation in Japan, the EU and China, then the this reputation is even more aligned with the Luxury marques. Keep in mind that this “luxury brand” was not created by Ford, it started well before Ford purchased Volvo in 1998.
I think that while yearning upwards has it’s pros and cons for Volvo, it was the only course open to them when this upwards mobility began with the 700 series. Labour costs in Sweden and Belgium combined with the cost of importation conspire to make a Swedish economy car an impossibility unless it was made in Mexico. Remember that Volvos had never been cheap cars in the way Saabs of the same era were, they were stable, solid reliable transportation that was comfortable and safe. Their “brand” of luxury, playing on the Scandinavian design is probably one of the few courses open to them and has until now served them fairly well.
As Sajeev points out, Volvo would have been a good member in the Ford international luxury game, but as the only member in that family left they really don’t compete in the same way Jag did or Lincoln could once again. They are a niche player and if they stay true to their core they will remain one. The question I want to know if how will the Ford brands survive without someone’s parts bin to dig from?