Volvo for sale – US$6 billion
December 5, 2008 by Karl Peskett
News came through the other day that Volvo’s sale by Ford was definitely on the cards. Now a US source has identified that Ford may try to sell the Swedish brand for as much as US$6 billion.
This figure is scarily close to what Ford bought Volvo for in 1999 – US$6.4 billion. But buyers may be wary, as only truly secure and safe assets are the ones sought after.
Volvo’s third-quarter pretax loss was up to US$458 million. A far cry from its US$167 million loss a year earlier as sales declined 24 percent to US$2.9 billion. Volvo also spoke about job cuts of up to 6,000 workers in October and came public in November about talks with Sweden’s government about potential financial support.
Bloomberg reports that BMW, Daimler, Volkswagen and Renault are all unlikely to bid as they either have their own luxury brands, or are flat out not interested.
Ferdinand Dudenhoeffer, director of the Center for Automotive Research at the University of Gelsenkirchen in Germany says that Ford may not reach its ideal price.
“Anything other than a heavily discounted sale seems unrealistic,” said Dudenhoeffer. “For a buyer it’s the best time that one could wish for. But it’s not ideal for Ford.”
While Chinese firms haven’t yet been queried, the Asian continent seems the most likely prospect for Ford’s sale of Volvo.
Print it: 
Shanghi Automotive or Tata are the only two cashed up buyers out there at the moment. Maybe Hyundai – Kia? I read Hyundai are looking at GM’s Jeep as a prospective part or full purchase.
Anti spam word = ford :)
Hahaha, I’m not much good as a business broker or valuer, but I’m gonna have a stab at this one –
What would a sane person pay for a business that
1) sells high priced luxury products in a seriously declining market
2) is already bleeding money
3) has sales of 2.9Bn but declining at 20-40% ore more (based on AU’s rate of car market decline, but reflected worldwide)
4) add your own ctiteria here
answer:
1) $1.00 to enable the share transfer, and then watch it lose another $1Bn in the next year in the hope you might get a return on your investment one day
or
2) Nothing – don’t touch it at all.
And Ford thinks they will get $6Bn – what are they smoking????
Maybe Honda will buy it with their F1 savings, at least then they’d have a nice 5cyl turbo engine to use…..
I can’t believe they paid over $6b for Volvo in ‘99, never-the-less selling it for $6b now.
Salesmen, Jeep is actually owned by Chrysler, not GM.
But 6billion?? thats fairly cheap, there is a few billionaires around that could afford it as a private purchase..
Thanks Tomas79, my mistake. If i was a billionaire (i wouldn’t be at work to start with) i would not see Volvo as a good investment. As Reckless1 pointed out. And think of the cost of re structuring and building a dealer network. I bet if another manufacturer bought it they would use the technology and re badge it as their own. Even 6b is allot, it might still be worth doing your own R and D instead of buying what is most of Ford’s products already.
US$6 Billion. Tell em their dreamin.
I have AU$6 in change here. Will that do?
Reckless,
Volvo are only marketed as ‘high price luxury’ in Australia. And Australia is really the only market that once had that negative ‘grandpa’ image of Volvo as well.
Kind of repeats what I said the other day, like everything it is for sale to the right buyer.
I don’t believe they actually expect to sell it, but hey if Shanghai Motor said “Less Prease” then it’d be gone.
I was just wondering Why Ford wasn’t asking for Too much From the US Congress compared to GM & Chrysler, & this is the reason why. Even as a GM man i gotta say Hopefully Ford doesn’t have to sell another Brand to stay in the Game. I mean they have already sold, Land Rover, Jaguar, Aston Martin
Well it would be nice if those chinese manufacturers all bought a share in Volvo. At least then they’d actually be able to make something that is somewhat safe with volvo’s saftey technologies.
I heard Renault-Nissan were thinking of buying Volvo off GM, but I think Carlos Ghosn denied that. I don’t really know much about this financial type stuff. I still have to say, the S80 and XC70 are really nice looking to me. They have such a luxurious sense to them, its a shame Volvo are struggling so much.
Steve
Heres an idea; everybody in the world puts in a dollar and it becomes the peoples car company. For example, the world votes on whether Volvo should make a supermini or a limousine, we decide. We decide on pricing and hey, who knows, maybe one day we’ll all get a bit of a return on our investment. People might be more inclined to buy a Volvo if they are part owners and more people would be happy with how they looked, how they drove, how green they were, how sporty they were, how practical they were… because there would be majority votes about it all.
Hey Steve-Poyza, just to let u know, Volvo is owned by Ford. And Recently i Heard that GM was planning on Selling Saab. 2 sweedish car Manufacturers from GM and Ford up for sale? Possibly
Alex your idea about everyone putting a $$ Dollar in is pretty good, but then what if every one gets a word on what kind of Car Volvo should build, you would have a bunch of stupid Environmentalist wanting a Hybrid, then some may want a diesel which is acceptable and still better than the hybrid choice, and then you will have some normal people/ Enthusiasts wanting V6’s & V8’s, or turbo’s etc.
And then if we decide to go for a majority vote, all the rest would be disapointed. And i think it would be a bit tricky to make a Sporty Volvo, that is Good looking, pretty Practical & last but not least green, Although i would prefer an orange one. LOL yeah i know what green means.
Although it sorta is a good idea to let the people choose and be incharge.
Why doesnt Australia buy Volvo and Saab and make em our official cars and get rid of Holden and Ford…. Then we could be proud.
Elitist – If Australians aren’t buying that many Volvos or Saabs at the moment; what makes you think that would somehow change if they were to replace Holden and Ford as our “local” cars?
Unlike most people on this website; You may not like Falcons or Commodores or be Proud of what Holden and Ford have achieved etc…. but at least they are able to deal with Australias harsh enbironment alot better that a number of imported cars including Volvo and Saab.
I mean the Air-conditioning in a Saab for example feels like your being blown on by an atshmatic eskimo which is just what you need when its 32 degrees plus.
Australian cars are great LPG cars. Well, Falcon is.