THANK GOD: Ford may sell Volvo to BMW (fwd'd post)

May 28, 2007 4 Replies

Subject: Ford May Sell Volvo to BMW



Ford turned Volvos into tinny gas-guzzlers, and it is now losing money by the bucketfulls.



- - - - - - - - - - The Swedish newspaper Göteborgs-Posten reported that Ford plans to sell its Volvo cars operation and that BMW is a possible buyer.



Ford bought Volvo's automotive operation from the Volvo Group in 1999. The Volvo Group serves the heavy-duty on-road transportation market as well as off-road, stationary, marine and aerospace markets.


Ford's Premier Automotive Group, of which Volvo is a member, lost $327 million in 2006.



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My understanding is that the Volvo part of Ford's PAG generally has made good profits whilst the British Patients, Land Rover and Jaguar, chalk up the red ink.

Well that's Ford for you, kill one of their top selling cars, then sell off one of the most profitable companies they own. I never did care much for the Taurus but people were buying the things in droves, what were they thinking stopping making them?

Ford ownership of Volvo if anything been a net positive for the company. Whether BMW ownership can provide any improvement is at least an open question. I'm sure that some will see having the name BMW affiliated with Volvo as being a de facto benefit, but the Chrysler/Daimler debacle is a clear example that a fancy name can result in less than fancy results During the time of Ford ownership I've seen several interesting good looking Volvo cars that represented significant improvements over earlier models.

Whether the PAG as a group lost money is not relevant but whether Volvo made money within that group is relevant and indeed they are profitable.

For the last several years the vast majority of Tauri were sold to rental and other fleet customers, which are generally not very profitable sales.

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