Ford is in talks with its China partner Changan Automobile Group for a possible sale of Volvo. Ford is trying to divest itself of its last remaining foreign brand and sell the Swedish auto maker for much needed cash.
Ford is looking to divest itself of its last remaining foreign brand. Last week it put Volvo up for sale with a 6 billion dollar price tag.
According to reports, Ford and Volvo officials held talks on a possible sale last month with Changan president Xu Liuping at the Guangzhou auto show in China. There are no details yet on the terms that were discussed.
Ford has a joint-venture with Changan Automobile Group's Chongqing Changan Automobile Co, to produce Ford Focus sedans for the Chinese market.
Chinese automakers are seen as possible buyers of assets from the troubled US automakers, as GM is also looking to sell its own Swedish premium brand Saab. As Japanese and European automakers struggle with collapsing sales too, there aren't many established players around who would be willing to buy a car company like Volvo. Buying Volvo may suit Korean automaker Hyundai (which also owns the Kia brand). But Chinese automakers looking to establish a presence in Europe and North America, or a private equity group, are the most likely buyers.
Ford is hoping not to take too much of a hit on its investment. The Detroit car maker bought Volvo for 6.4 billion US dollars back in 1999. The Swedish brand, known as a maker of safe and reliable vehicles, has at times been profitable for Ford. But lately it has become a money pit and lost over 450 million dollars in the third quarter of this year alone.