On Monday, the German magazine Der Spiegel will report that Daimler had looked at taking Volvo off Ford’s hands. But after trying Volvo on for size, the good folks in Stuttgart decided it’s not a good fit. “Daimler boss Dieter Spiegel has carried out a close examination of a possible purchase in the past few weeks and acknowledged a series of possible drawbacks,” the German weekly will say. According to Der Spiegel, Daimler scoffed at problems with harmonizing Volvo with its own Mercedes cars. The article is not even out yet, and it has already been shot down by a missive from Stuttgart. Two days before the report was to appear, Daimler said it’s a fabrication. “We were never interested in Volvo,” a Daimler spokesman said to Reuters. Not interested doesn’t mean they didn’t look.
Der Spiegel says, Volvo has also been rebuffed by BMW. With little hope of finding a buyer in Europe, der Spiegel now floats China’s Changan as a possibility. Reuters also writes today: “A Chinese newspaper last month named Ford’s China partner Changan Automobile Group as a potential buyer for Volvo. Ford declined to comment on the report.”
The flirt with Changan, Volvo’s joint venture partner in China, has been thoroughly reported by TTAC. We also covered the rather flimsy cover story of Ford execs which had met Changan execs simply to inform them “as a courtesy” that Ford was looking for a Volvo buyer. Since then, a row of other suitors from China and India had been trotted out, only to say a few days later that they are not interested. So after pimping Volvo across a couple of continents, the story is back where it begun: At Changan.
Ford said last month that it was “reviewing strategic options for Volvo in response to the significant decline in the global auto industry particularly in the past three months and the severe economic instability worldwide.” Ford said the review probably would take several months to complete. Apparently, it does. The Chinese are in no hurry.
And don’t you just love it when carmakers start talking “strategic options?” In milspeak, the strategic option is when you start lobbing ICBMs at the other side. In fordspeak, it’s “people don’t buy enough cars, so we need a sucker who gives us $6b for a brand we have left over. We take less. Make an offer.”
There are only two rational buyers for Volvo: 1) A Scandivavian group interested in protecting the home-team job base. or 2) The chinese looking for an entry point into the global market with an established brand and ready-to-go product designs.
Ford would be massively stupid to go for #2, because it enables their long term competition. Ford has been at the car thing for over 100 years now and you would think they wouldn’t be eager to further undermine their own prospects. Shutting Volvo down or keeping it on minimal life support makes more sense than the Chinese option.
Option #1 could work if there were willing buyers; much as Japanese investors have taken more of Mazda off Ford’s hands while still keeping the engineering and production tie-ups in place.
There are way to many car brands with little differentiation ability for their product.
Some will have to fail for the industry to be healthy again.
Did Ford ever have clear strategy for Volvo or GM for Saab? What “value” did they think they were buying in the first place?
Ford’s strategy was to buy a near-luxury European brand to compete with Acura, and Lexus, and to a lesser extent, BMW and Audi.
The only problem was that they bungled it badly, choosing to keep their products stale instead of making them competitive. (the whole Jaguar thing didn’t help either)
PeteMoran :
January 3rd, 2009 at 7:41 pm
Did Ford ever have clear strategy for Volvo or GM for Saab? What “value” did they think they were buying in the first place?
This was Jac “The Knife” Nasser’s baby. He helped Ford get to the sorry state they are in today.
The way it looks, there are no Scandinavian buyers. The Swedish government expressed tepid willingness to provide some money, but absolutely ruled out any ownership in Volvo. A Volvo on its own cannot survive. In Europe, Volvo stands for “safe,” “heavy,” and “boring.” Can’t think of a European maker who’s yearning to have a Volvo in their brand portfolio.
I still think BMW should/could pick up Volvo for a song and sell a couple of the current models (XC, S40, whatever) with Mini. Then BMW would have distinct RWD and FWD divisions.
Volvo had decent cars until Ford came along. They should get back to building roomy, reliable, comfortable, slow but fuel efficient wagons. Maybe even diesel ones. With a stick.
Did Ford really need yet another channel for badge-engineered, sorry “shared platform”, Ford sedans & SUVs?
So, basically, in a more honest world, Saab and Volvo would be dead already?
In my mind, the German company with the cash and the need for a brand like Volvo isn’t Mercedes or BMW–it’s Porsche. They could continue their corporate quest to make the world’s greatest sports cars without further diluting the focus of their brand. While applying their cash and engineering prowess to restoring the Volvo brand to its rightful place as the world’s safest cars. Of course they’d have to manufacture everything in India or China to bring it in at a competitive price point and still make a profit for their shareholders :-{)>
volvo’s Diesel 6 cyl failed miserably back in the 80’s, the 6 cyl was VW made, it was under engineered, I had a Lemon too. Head cracked had to sell her cheap. A Dsl mech fixed it & sold for more $$ again.
Nonetheless Diesel didnt do justice for Volvo. The 4,5 cyls were OK.
Their V6 were equally duds.
Even her 16 valves were troublesome. According to a guy who specialise in Vs.
“They should get back to building roomy, reliable, comfortable, slow but fuel efficient wagons. Maybe even diesel ones. With a stick.”
It’s called Subaru.
Volvo actually has very decent cars right now, it’s just that it does not do anything better than their competitors.
Image – the Germans have it beat.
FWD entry-level luxury – Acura has it beat.
Reliable wagons – why would you choose Volvo over a cheaper Subaru?
Shut it down and keep the brand is what makes the most sense.
Sajeev Mehta:
I still think BMW should/could pick up Volvo for a song and sell a couple of the current models (XC, S40, whatever) with Mini. Then BMW would have distinct RWD and FWD divisions.
That could work. Marketing with “Volvo = A Chick’s BMW” may work.
But the competition is brutal. I’m sure BMW outsells Volvo in NA. And their dealer network is probably Ford-bloated and screwed up. This brand may be toast.
Volvo’s were traditionally a small ( midsize in modern terms) RWD. As an import, they were regarded as sensible, solid and safe. Guys with elbow patches on their blazers drove them. The 850 FWD was the beginning of the end for them.
Lucky for Volvo… they must not have any cash that Daimler can take, screw the company up, and then sell it to some idiots.
@Andy D
The 850 FWD was the beginning of the end for them.
Actually, the 850s were exceptional cars, particularly the Turbo and R models. The cargo carrying capacity is quite superior to any other Euro wagon of the era (and likely bested all but the massive final generation of GM’s B-body wagons), and the performance was quite good. The only way the 850 might be construed as “the beginning of the end” for Volvo is that one could interpret it as the beginning of Volvo’s ill-considered march up-market. In all other respects, FWD or no, the 850 was a very good model for Volvo.