Volvo again! : despite rumors of sale

2009 Volvo C30

China's Chery considering bid for Volvo

BEIJING - China's rapidly expanding Chery auto group is considering a bid to buy Swedish-based Volvo from Ford Motor Co., state media said on Monday.

The Caijing business magazine quoted sources as saying that Chery has not yet reached any agreement or applied for permission from the government of Anhui, the company's home province.


It said Jin Yibo, an assistant to Chery's CEO, had ruled out the possibility of buying Volvo, but other sources told the magazine that Chery had already contacted banks and private equity firms about financial backing for a possible acquisition.

Industry insiders estimated that Volvo could cost Chery more than 30 billion yuan ($4.4 billion), it said.

Ford spokesman Mark Truby told the Associated Press on Monday the automaker won't comment on the report.

He told AP that Ford decided last year to concentrate on improving Volvo's business performance, rather than selling it.

Chery is a state-owned firm set up by the government of Wuhu city in Anhui province during the 1990s.

It produces several lines of passenger cars, mostly cheap compact models, and plans a share offer in Shanghai next year, Caijing said.

Earlier rumors reported in state media had linked the Shanghai Automotive Industry Corp. to a possible takeover of Volvo.

and this one rumor ?

Volvo still wants to compete with the Germans, despite rumors of sale

Ford says Volvo's not for sale, and the Blue Oval would be smart to hold on to its remaining vestige of the Premier Auto Group as long as it can, especially since engineering and platforms have become so entwined with Dearborn's product line. For its part,

Volvo is angling to take on the high end Germans. Volvos have long been premium products, having built a reputation on exceptional durability, meticulous engineering, and of course, safety. Try as it might, however, Volvo has a hard time competing head on with BMW, Audi and Mercedes. The cachet of the Swedish automaker is diminished compared to the Germans, and dynamically, Volvos tend to get schooled hard despite being good, capable drivers when taken alone.

Operations chief Steven Armstrong tells Automotive News that Volvo is looking to be mentioned in the same breath as its intended targets, even as losses mount and layoffs ensue. Volvos already occupy the same pricing arena as the premium Germans, but that's partly due to a weak dollar and transport costs.

The possibility of building its cars in the United States might bring prices down and allow better developed performance versions, versus the outclassed R models of the past.

Armstrong says that the fuel economy issue will be addressed soon as technologies like start-stop, energy recovery from braking, and further down the road, hybrid powertrains are brought to market. Green is a good way for Volvo to go, given the Scandinavian proclivity for low-impact, gentler consumption.

[Source : Automotive News #1 #2.. sub req.]