Is Volvo Next to Go?

July 2, 2008
Volvo C70

Volvo C70

With its various British brands now sold, will Ford Motor Co. sell off the last of its foreign brands, closing the books for good on its once-promising Premier Automotive Group?

Numerous reports have appeared in recent weeks, suggesting Ford would like to offload its Swedish brand, Volvo Cars; many of those reports pointing to Renault SA as a strongly interested party. But if so, Ford is keeping any discussions with the French maker away from Volvo, which "does not have any knowledge" of such talks, the Swedish maker's CEO, Steven Armstrong, was quoted saying to the wire service Reuters.

However, Reuters quoted sources "familiar with the matter," who insisted that preliminary conversations had taken place between Renault and the cash-strapped Ford, which has raised much-needed capital over the last year by selling off Aston-Martin, Jaguar, and Land Rover. Together with Volvo, they had comprised the Premier Automotive Group, or PAG, which Ford once hoped would provide a third of its global profits.

Soon after joining Ford in late 2006, Ford CEO Alan Mulally suggested the sale of Volvo was something he'd consider, but he later reversed that position. Senior sources at Volvo told at that time that, after studying the possibility of a sale, Ford realized it could never come close to recovering the $6 billion it had spent to buy the Swedish company, known for its emphasis on safety.

Complicating matters, Volvo's product development operations have become tightly interwoven with those of Ford itself. It was far easier to separate Aston, Jaguar, and Land Rover without such complications.

Mulally has said he intends to "fix" any problems at Volvo, and a Ford spokesman insists that remains the status quo.

Would you keep or sell Volvo?

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