VOLVO MUST NOT BE SOLD

[96 Pony]

Poetic, but it also is cheaper to let Mercury die than to kill it.

 

And who knows? There might be some life left in the brand after all--as long as they don't suffocate it with a fat load of all new product that requires unrealistic increases in volume and shifts in buying demographics (looks in the general direction of Saturn at this point).

 

Look, I would LOVE to see Mercury break out and come up with something that would differentiate its self from Ford. I still remember the days when Mercury was seen as a legitimate step up from a Ford and half way to a Lincoln.

 

Those days are over and have been since the last time Mercury tried to be something separate from Ford with the Cougar in the late '90's and then the Maurader.

 

Maybe you are right. Maybe they are just letting it die a slow death.

 

As for Lincoln, I love the MKZ/Versailles - it's a great competition for Buick. But unless the MKS is something equal to or better than the STS, Ford needs to keep Volvo for the luxury market.

[salsakingcpa]

1) Still costs money to contest it.

what do u care? are u an employee of ford? most likely since u r the only one who worries about costing money to contest it. don't u have any shame? sure u r getting paid by ford to blah blah here, but i guess everything is okay bec' u go to u r sunday's church, and wash u r sins away right?

 

sale is going to happen sooner than u expect it.

 

mercury yeah is a goner.

[salsakingcpa]

This is a gift to RJ, the official spin miser of this blog who will be promoted to ford motor company's pr man!

 

Tuesday, January 1, 2008

Speculations Increase on the Possible Selling of Volvo : New volvo New car review 2008

Speculations Increase on the Possible Selling of Volvo

by Jason Moore

 

Ford part of the once renowned Detroit's Big Three and producer of top-of-the-line Lincoln catalytic converter has released a statement refuting reports circulating in both UK and US that the automaker will dispose of its profitable Swedish unit, Volvo.

Sunday Times has reported yesterday that Ford has decided two weeks ago to sell Volvo for as much as US$8 billion. The Sunday Telegraph has also reported that Ford was willing to listen to offers from potential buyers of the automaker and would make a final decision on whether to proceed after completing the sale of its Land Rover and Jaguar businesses.

Ford said last month that it was conferring with investment bankers about options for Jaguar and Land Rover. The Dearborn, Michigan-based automaker is trying to restore a profit after recording a US$12.6 billion loss last year. The Sunday Times has reported last July 8 that Ford has set a deadline for bids to buy Jaguar and Land Rover.

Ford spokesman John Gardiner has declined to comment on reports in UK newspapers and refrain from saying whether there was a deadline for expressions of interest in Jaguar and Land Rover.

It can be remembered that Ford bought Volvo Cars from Volvo AV in 1999 for US$6.45 billion to become a part of the Premier Automotive Group of luxury-brand cars together with Jaguar, Land River, and Aston Martin. Ford sold its Aston Martin last March to a group of investors led by the UK auto-racing champion David Richards for US$848 million. However the sale was concluded only last May.

With the sale of the Aston Martin, rumors have started circulating of the possible sale of Volvo, Jaguar, and Land Rover brands.

Volvo's sales for this year is expected to surpass its 2004 record of 456,000 cars and sport-utility vehicles with the helped of new models and the increased in demand in Russia that is according to Fredrik Arp, the division's chief executive officer in an interview last June 26.

At present Volvo is focusing its efforts to expand other markets such as in Russia, China, and India in order to match the growth of its competitors such as Volkswagen's Audi luxury division and BMW's luxury cars.

Speaking of BMW, the Sunday Times has reported that the world's largest maker of luxury cars is interested in bidding for Volvo. Other automakers were also reported of showing interest on Volvo and these are Renault SA, Hyundai Motor Co and an unnamed Chinese manufacturer.

The Sunday Times has also stated that private-equity companies may also be attracted to buy Volvo. But of course all these would remain as mere speculations unless Ford will formally announced that it will sell Volvo.

[salsakingcpa]

2nd gift to RJ:

 

Saturday, February 2, 2008

BMW takes two on merger by Evander Klum

 

 

DaimlerChrysler, parent automaker of Mercedes-Benz, has already signed the papers to their corporate divorce while their strong rival BMW is planning to launch a takeover bid for Volvo earlier this year as revealed by Autocar. It can be noted that most analysts have expressed their concern over mergers in the auto industry saying that it is not pragmatic. But it looks like BMW just don't want itself to be daunted by the number of failed mergers in the industry and preferred to personally experience it.

 

Anyway, the Bavarian automaker and producer of high quality BMW exhaust have already requested a complete breakdown of Volvo's financial position from a European investment bank which is handling enquiries on behalf of Ford, the owner of Volvo. Reliable sources have also revealed that BMW has earlier eyed the Alfa Romeo as its takeover target.

 

According to industry experts BMW is planning to expand its range of brands to support the future growth of the company. Likewise, part of its plan is underpinning the front-wheel-drive Mini division by expanding its output and it can do so with the help of Volvo.

 

 

Why Volvo? Company bosses at BMW saw Volvo as the fitting global brand complimentary to BMW, which they deemed has considerable room for growth and room to accommodate Volvo. Although BMW will always emphasize driving pleasure, Volvo on the other hand will contribute safety and environmental concerns to the mix.

 

At present it not yet clear what BMW plans are but its probable that the larger saloon and estate models of Volvo just in case would be switched to BMW platforms offering both rear-and four-wheel drive. The smaller cars in the Volvo's range would remained front-drive and would probably be merged to the Mini family expanding this model range.

 

The Mini brand is currently one of the biggest problems of BMW and it has already been forced to allot additional investment just for the redesigning of the new Mini as well as engineering the Mini Clubman estate. But despite all the efforts Mini sales are still down on their 2005 peak and the BMW insiders admit that a total annual output of 250,000 to 270,000 cars is just not enough to secure a profitable long-term future for the Mini brand.

 

Potentially with Volvo, BMW could build the proposed large five-door Mini and Mini SUV on the same front-drive chassis as the future S40 and V50. And let's just say for the sake of argument that this was done, an annual output of 500,000 upmarket Volvo and Mini front-drive cars could ensure long-term profitability.

 

The expectation for future profit is not new when it comes to merger in fact every one of those failed union in the auto industry is hoping for the same thing that's why they merge in the first place. Unfortunately, none of those merges survive except for the seven years partnership between Nissan and Renault but even their union is still uncertain and nobody knows what may happen in the future.

 

And let us not forget that seven years ago BMW was humiliated when it incurred massive losses which forced it to split up and sell the Rover Group which it bought in 1994. The question now is: Has BMW forgets the lessons of the past or has it learned a lot to create a new successful partnership? Well only BMW can answer that.

[P71_CrownVic]

This is a gift to RJ, the official spin miser of this blog who will be promoted to ford motor company's pr man!

 

THAT would be the END of FMC.

[Blue II]

Lewis Booth, only yesterday, reiterated that Ford has no intention of selling Volvo. See:

 

http://www.detnews.com/apps/pbcs.dll/artic.../805030340/1148

 

I do find it interesting that, according to the author, that Ford has recently taken steps to separate Volvo's operations and finances from Ford of Europe.

 

There is some truth to steps being taken to seperate some Volvo operations. Some engineering as well. Unsure what that means but it is a fact.

[elkarlo]

There are also a lot of places where they sell Volvos but not Lincolns. Oh yeah Europe, Japan, and prolly a lot of places outside NA.

[salsakingcpa]

Ford strategy is to sell volvo, and use its own ford dealers (some of them of are owned by ford motor company) to sell lincoln. Thus, it won't be needing volvo network to sell lincoln, and margins are going to grow because ford motor inc owns its own ford dealer network.

 

http://www.sbpost.ie/post/pages/p/story.as...2619-qqqx=1.asp

 

Ford takes controlling stake in Lindsay Cars

04 May 2008 By Ian Kehoe

The Ford motor group has taken a controlling stake in Lindsay Cars, which has eight motor dealerships in the North.

 

The Antrim firm sells, hires and services Ford vehicles, and has annual revenues of stg£116 million (€182 million).Under the deal, the British-based Ford Retail Group will take a 50.83 per cent stake in the firm.

 

The value of the deal has not been disclosed. The deal is subject to clearance from competition regulators in the North and the Republic. The Irish Competition Authority is conducting a routine phase one investigation, with a decision expected in the coming weeks.

[battyr]

BMW would be the only logical buyer of Volvo. They synergies that would be between BMW and Volvo would be the same synergies between Lincoln and Volvo. I also would think that BMW is desparate to improve fuel efficiency in Euarope. Volvo could help BMW improve fuel efficiency but they would have to sell more smaller and cheaper cars.

 

Since BMW does not have the resources to design a complete line of cars for both themselves and Volvo, they would keep a complete Volvo engineering team.

[battyr]

Ford strategy is to sell volvo, and use its own ford dealers (some of them of are owned by ford motor company) to sell lincoln. Thus, it won't be needing volvo network to sell lincoln, and margins are going to grow because ford motor inc owns its own ford dealer network.

 

http://www.sbpost.ie/post/pages/p/story.as...2619-qqqx=1.asp

 

Ford takes controlling stake in Lindsay Cars

04 May 2008 By Ian Kehoe

The Ford motor group has taken a controlling stake in Lindsay Cars, which has eight motor dealerships in the North.

 

The Antrim firm sells, hires and services Ford vehicles, and has annual revenues of stg£116 million (€182 million).Under the deal, the British-based Ford Retail Group will take a 50.83 per cent stake in the firm.

 

The value of the deal has not been disclosed. The deal is subject to clearance from competition regulators in the North and the Republic. The Irish Competition Authority is conducting a routine phase one investigation, with a decision expected in the coming weeks.

 

If Ford want to get the most value out of each Lincoln sold, then they need to have dealers that attract a richer customer. You don't want to sell Lincolns next to Fiestas. Remember if you are selling Lincolns in Europe, you likely will only have 1 model for the first couple of years. You do not want a large dealer network stuck with only one car that they can't sell at high prices. You want to sell a small number of cars, at a high price, in a very small dealer network until the brand is developed.

[salsakingcpa]

Rightly said but the way Mr. Mulally wants to approach it is to use economies of scale of having all fords, mustangs, and lincolns under one roof because many parts that go into lincolns will be fords parts. So the ceo is thinking why duplicate resources. If customers buy lincolns at ford dealers that's great if not that's great too (my opinion). Lincolns are just icing on the cake; in a few years, us plants will make many of fords automobiles including lincolns and exported to europe and other countries, and they will be all shipped together to lower shipping costs. To do otherwise, doesn't make much sense.

 

 

If Ford want to get the most value out of each Lincoln sold, then they need to have dealers that attract a richer customer. You don't want to sell Lincolns next to Fiestas. Remember if you are selling Lincolns in Europe, you likely will only have 1 model for the first couple of years. You do not want a large dealer network stuck with only one car that they can't sell at high prices. You want to sell a small number of cars, at a high price, in a very small dealer network until the brand is developed.

[Edstock]

Since BMW does not have the resources to design a complete line of cars for both themselves and Volvo,

And you know this how?

 

Anyway, the point is moot, because, Salsakookoo to the contrary, BMW is not going to buy Volvo, because, and please read carefully, buying Volvo does nothing for BMW, except make things more complicated, and exposes BMW to uneccessary risk and expense.

 

You will notice how BMW is expanding the FWD Mini line, and is contemplating building the Isetta A-car as an electric. On top of this, they are going to buy Volvo? Yeah, right.

[salsakingcpa]

edsuck's ego is so tiny no wonder he hangs around here so much; volvo wants to become a premier luxury company, and knows opportunity like this of purchasing volvo comes only once in a while so it will do it or become one of the most important front runners. It's possible that a chinese firm ends up buying it though. edscock doesn't understand the VALUE OF having one fewer competitor, the upside of one fewer competitor pays by itself. Even if volvo costs 10 billion bucks, bmw might do it; of course, it will go for a lot less.

 

You will notice how BMW is expanding the FWD Mini line, and is contemplating building the Isetta A-car as an electric. On top of this, they are going to buy Volvo? Yeah, right.

[J-150]

BMW would be the only logical buyer of Volvo.

 

 

of the non-Chinese, yes.

[J-150]

edsuck's ego is so tiny no wonder he hangs around here so much;

 

 

 

even if that were true, we still like Ed and greatly value his opinion, unlike you whom no one likes nor respects

[nilkilla]

volvo wants to become a premier luxury company, and knows opportunity like this of purchasing volvo comes only once in a while

buying themselves could be quite proftitable, but I wonder how the FTC would view it?

[battyr]

And you know this how?

 

Anyway, the point is moot, because, Salsakookoo to the contrary, BMW is not going to buy Volvo, because, and please read carefully, buying Volvo does nothing for BMW, except make things more complicated, and exposes BMW to uneccessary risk and expense.

 

You will notice how BMW is expanding the FWD Mini line, and is contemplating building the Isetta A-car as an electric. On top of this, they are going to buy Volvo? Yeah, right.

 

BMW needs to expand. Expanding the Mini line would be the safer way to do it. Buying Volvo would be the faster way to do it. If BMW does not want Volvo then I don't see anyone else paying good money for them.

 

Volvo is worth $6 billion to Ford because they are already integrated into Ford. They have a potential to make large profits by developing new products off Ford platforms at little cost. If another manufacturer bought Volvo, they would have to buy parts from Ford, convert Volvo to there way of doing things, while at the same time develop 7 new cars to replace Volvos line-up. It would cost an additional $10 billion.

 

Your right, BMW does have the resources to develop a FWD line, but it would take them maybe 10 years to get the product lineup that Volvo currently has. To modernize volvo quickly, I would doubt that BMW be layingoff Volvos engineers. They would need to use everything they get from Volvo.

[battyr]

of the non-Chinese, yes.

 

The chinese auto industry is mostly made of hundreds of small manufacturers that are partly owned by the government. I really don't think they have the resources to buy anything expensive. If a Chinese company wants to build a car, they can find hundreds of suppliers willing to help them develop components at low cost. They don't have the collateral to get wall street money for a large purchase.

 

Tata on the other hand is an independant conglomerate. They are a huge, international company from a country with a western style legal system. Even Tata had problems raising $ 2.5 billion.

 

If a private person, or company bought them, it would likey be Russian.

[Edstock]

Looking at it from BMW's point of view, in my simple-minded opinion, I just can't see BMW doing it. Simply, there are no benefits. Not to BMW, and those that control its shares.

 

Just leaving things as they are, has BMW developing profitable assets at a time when there are things like CO2 regulations to contend with, and world-wide financial instability.

 

As it is, Volvo competes with BMW's lower-end and mid-range vehicles, and clearly has some marketing problems with stale product and a slow replacement. So maybe, for BMW, the optimum strategy is just to let Volvo be Volvo, and suffer on with lacklustre performance. Let 'em keep dancing with Ford, why not?

 

And if you felt that the marketplace could handle extra growth, would the money be better spent bringing out new MINIs, like the SUV-MINI? Considering you can sell just about every MINI you can squeeze out of the factory at full pop? With Isetta, MINI and BMW 1-series, BMW got game in the small market, with their current business practice, and have the resources to ride out a problematic world economy. IMHO, the BMW management are bright enough to see that there is no reason they should be any luckier with Volvo than M-B was with Chrysler.

 

But, I could be wrong. And that's fine by me, considering that this is Blue Oval Forums. Ford sells Volvo? Fine by me, as long as they don't give it away. It would force Ford EU to move into the S-80 level with something above the Mondeo, with a blue oval.

 

So, I don't oppose selling Volvo, I just can't see BMW doing it at this time, and for the next 4-5 years. Maybe some Russkie will give it a try.

[battyr]

As it is, Volvo competes with BMW's lower-end and mid-range vehicles, ...

 

BMW is German, Volvo Swedish.

 

BMW is RWD, Volvo FWD.

 

BMW is performance, Volvo is Safety.

 

All rich people have money but some know the difference between FWD and RWD, others don't. Different markets!

[mackinaw]

BMW is German, Volvo Swedish.......BMW is RWD, Volvo FWD......BMW is performance, Volvo is Safety, etc.....

 

Yeah, there is some logic to what you say but remember that 6 billion dollars is a lot of money and something the Quandt family (who own a large amount of the company, somewhat analogous to the Ford family) may not sanction. Also remember that BMWs' history with buying car companies and then running them (Rover) has not always been successful.

 

Whatever, for the time being, I'll take Ford at their word that they are not going to sell Volvo. Maybe I'll feel differently next year.

[jpd80]

It's a longshot but PSA (Peugeot/Citroen) may look at Volvo as their possible luxury marque.

Ford already has a diesel engine alliance with PSA so maybe something further down the track.

 

BTW,

I don't believe Ford will sell Volvo inside of the next two years.

Edited May 4, 2008 by jpd80

[JETSOLVER]

Rightly said but the way Mr. Mulally wants to approach it is to use economies of scale of having all fords, mustangs, and lincolns under one roof because many parts that go into lincolns will be fords parts. So the ceo is thinking why duplicate resources. If customers buy lincolns at ford dealers that's great if not that's great too (my opinion). Lincolns are just icing on the cake; in a few years, us plants will make many of fords automobiles including lincolns and exported to europe and other countries, and they will be all shipped together to lower shipping costs. To do otherwise, doesn't make much sense.

 

So that thinking is different from the now failed(from Fords point of view anyway) Jag experiment how? I can't wait to see how long its takes Jag to unwind from the source of most of the engineering and a good percentage of the bits and of course, that famous line about bulk buying saving money(I'm guessing a few years at least).

 

As Ford decided to divest itself of those assets at HUGE losses, I wonder if this sort of thinking is a case of doing the same stupid thing multiple times.

 

If they really want Volvo to make a go of it under Fords roof, sell most of it, keep an interest as per the original Mazda thing, and for crying out loud, let Volvo people design and build Volvo's. As perhaps Lincoln should be left to reinvent itself as Lincoln, not a second line for Ford's engineering stretched to accommodate a dealer network. Its obvious to me that the Caddy experiment has paid something back to GM, if nothing else in prestige and respect, something that N.A. luxury has been lacking since the late eighties. (minus the XLR abortion in place of course)

 

Or was SAAB to good an example? (thats irony of course)

 

And of course, the idea of a common cockpit config(not common bits!) in the Boeings was lifted lock, stock and barrel from the Airbus example as they started to cut into Boeings margins. The rest of those birds have NOTHING in common with each other, and thats a good thing as trying to shoehorn a component into the wrong job costs more than you could possibly save. Or, in that case, lives.

[salsakingcpa]

I agree with you 100%; but time is running out because usa is headed into a deep recession, and Mr. mulally knows that cash is king in a recession. That is the main reason Mr. Mulally is selling everything he get his hands on; otherwise, I am sure he'll keep Volvo, and he would have kept other marquees including aston martin.

 

At Boeing, he wasn't the main ceo and chairman, boeing board of directors dropped the ball and brought a new ceo from GE, and that is the reason he couldn't do much there except fire/layoff half of its labor force.

 

If Volvo is sold, it is going to happen very soon, and it will be sold (or a definite agreement will be signed) before the end of year. Otherwise, I don't think volvo is going to be sold.

Edited May 5, 2008 by salsakingcpa

[battyr]

It's a longshot but PSA (Peugeot/Citroen) may look at Volvo as their possible luxury marque.

Ford already has a diesel engine alliance with PSA so maybe something further down the track.

 

BTW,

I don't believe Ford will sell Volvo inside of the next two years.

 

PSA is too small to survive. They would do well with Volvo. The problem is that I don't think they can raise the money. If they can, they will end up with too much debt. What PSA needs is either be bought out by someone or to Merge with an equal.