Ford will be focussing on improving Volvo’s financial performance but will ‘continue to review the brand periodically’.
Mulally said: "Our plan now is to not sell it and to focus on improving, especially, the cost structure and the position of the brand itself reflecting their new terrific lineup of cars and trucks."
He said Ford would also be working on improving Volvo’s position as a premium brand.
Volvo's earnings are now combined with results from Jaguar and Land Rover as part of Ford's Premier Automotive Group, but Ford is planning to sell Jaguar and Land Rover early next year.
Ford's Premier Automotive Group reported a pre-tax loss of $97 million (£46m) for the third quarter, a substantial improvement from last year's pre-tax loss of $508m (£241m) in the same period.
Ford said Volvo lost money but it did not break out the unit's results.