Ford has put Volvo on the auction block, but buyers are scarce. Ford may not be able to get its 6 billion US dollar asking price for an unprofitable, niche automaker.

Ford is looking to unload Volvo and has put a 6 billion US dollar price tag on the Swedish automaker. Ford is using JPMorgan Chase & Co. as an adviser on a possible sale.

The Big 3 Detroit automakers are making a bid to the US government for a 34 billion dollar bailout and each automaker is taking steps to demonstrate they are serious about restructuring their companies and cutting their losses. Volvo has not been a profitable part of Ford's business and lost over 450 million dollars in the third quarter of this year. Ford is asking for a 9 billion line of credit as its part of the bailout package.

Ford bought Volvo for 6.4 billion US in 1999 but may not get the 6 billion it is asking for it today. These are tough times in the automotive world and it may be difficult to find a buyer. Earlier this year Ford had discussions with Renault on a possible sale of Volvo to the French car maker, but ultimately Renault wasn't interested. Other European car makers such as VW already have their own partnerships with premium or luxury brands and therefore would have little interest in buying Volvo.

Asian automakers are another avenue for Ford - companies such as SAIC Motor Corp., China's largest car maker, or Hyundai of Korea. Another possibility is purchase by an equity group interested in buying a name-brand company on the cheap.

The Swedish government is also considering providing aid to its two domestic brands, Saab and Volvo, both in trouble because of their parent companies, GM and Ford, respectively. The government may consider putting together a deal for the Wallenberg family, who control Sweden's Investor AB, to make a bid for either car maker. It is unlikely the government of Sweden is interested in directly buying either Volvo or Saab.



Be part of something big