Ford in Talks to Sell Volvo?

With difficult times come difficult decisions. Ford has reportedly begun talks with several automakers about selling its Swedish luxury brand, Volvo. According to Reuters, Ford spoke to French automaker Renault, as well as China’s Dongfeng Motor Group.

The official word from Ford remains that the brand does not have plans to sell Volvo, despite being in informal talks which started as early as last fall. Renault opted not to proceed due to a difference on price, although Ford and Renault have since spoken on the matter; a spokesperson from Dongfeng stated that he “could not rule out the possibility that informal initial talks may have taken place.”

While Ford has been in a difficult financial situation, including the loss of an estimated $15 bn over the past two years, Volvo has also been hit by hard times. Due to a significant portfolio revamp the brand lost money during 2007. Ford wrote the value of Volvo down to $2.4 bn, much lower than the $6.45 bn it paid for the brand in 1999. Ford has also liquidated its Premiere Auto Group division, selling Aston Martin, Jaguar and Land Rover this year; Volvo is the sole remaining brand of the group.

Ford has benefited massively from having Volvo as part of its portfolio. Some of its domestic products are based directly on Volvo platforms, such as the Flex, MKS, Taurus and Taurus X (Volvo S80), while its groundbreaking new European products, the S-Max and Mondeo, utilize the C1 platform that is shared in common with the new S80, V70 and XC70. In Europe, a variety of Ford products use the Volvo inline-five turbo engine too, such as the high-performance versions of the Focus, Mondeo and S-Max.