Why Ford Wants to Sell Volvo?
Things have not gone well with Volvo since Ford bought it in 1999. At that time, Volvo Cars Corporation did not exist and was the only ubiquitous AB Volvo, the Swedish corporation that included Volvo Trucks (trucks), Penta (marine engines), Aero (aero engines), Bus (obviously) and Cars. The latter division is not walking well, and Ford thought it would be good business to buy. So FoMoCo (yes, Ford Motor Company) paid U.S. $ 6.400 million and apparently all won: AB Volvo, would shed its white elephant and Ford had a good business opportunity at hand.
Ten years later, things are totally different. Despite the large initial cash injection, which first bore fruit with the S60 (not counting the S80 that came out this year, it was the result of work of AB Volvo) and then the rest of the current range of models, the response of public was not what was expected and sales of the (former) Swedish brand were declining progressively, first silently and now shouting, his October sales report shows a drop in sales of 52% compared to last year United States, which is for the vast majority of your target market makes larger.
This, coupled with the financial crisis affecting the U.S. Big Three automakers (General Motors and Chrysler as well as Ford) had little by little Ford got rid of their businesses overseas. That’s how he got rid of the marks that comprise the PAG (Prestige Automotive Group): Lincoln, Aston Martin, Land Rover, Jaguar and Volvo, which was the last one left. After intense speculation about its possible sale, denied at every turn by Ford, the inevitable finally happened: The U.S. giant announced that it “will reassess its strategic options for Volvo.” In Castilian, will sell the brand.
In addition to this announcement, and according to unofficial sources, Ford would be willing to receive U.S. $ 6.000 million to sell the brand, ie “only” $ 400 million less than it cost. Tacit admission that Volvo is not right. The sale is finalized, Ford be achieved both cash and urgently needed, and simultaneously cut costs.
Potential buyers of Volvo would, finally, SAIC Motor Corp. (the largest automaker in China) or Hyundai, South Korea. The next few weeks will tell us what ultimately happens to the traditional Swedish brand.