Ford may soon have to face the prospect of being “stuck” with Volvo because the ailing Swedish brand has become a luxury no other car manufacturer can afford, it was claimed this week.
As the troubled US giant finally announced it was ‘re-evaluating strategic options’ after months of denying it wanted a disposal, industry analyst Professor Garel Rhys rated Volvo as potentially impossible to sell.
“As we move from recession into depression across the industry, every company is counting the funds for its present business.
“The luxury of purchasing another brand and the extra costs of trying to imbed it would be enormous and I wonder if anyone would want to do it.
“Volvo is not an attractive proposition because sales have been on a downward trend and it is not profitable. No potential buyer comes to mind, given that every global market is turning down and there’s no sign of growth,” he said.
In an interview with AM, Rhys said that while Volvo was bigger than Jaguar and had greater assets, it was unlikely to attract interest either from the industry or venture capitalists.
“It’s true that PSA and Renault are barred from 11% of the market because they don’t have a non-volume brand, but that doesn’t mean that Volvo would allow them automatic access.
“Even though Ford has spent a fortune on it, it’s not in the same league as the German premium brands. There might be some emotion behind the name, but Volvo is not powerful in a commercial sense.”
Fellow analyst Professor Peter Cooke, of Buckingham University’s automotive business school, said:
“A buyer would need to be someone with deep pockets looking to build a global brand quickly. Perhaps an Eastern buyer might be appropriate.”
Ford, which said the re-evaluation process would take several months to complete, has also approached the Swedish government for funding in a joint move with GM, which is also keen to bolster finances at Saab.
Observers believe that securing Swedish backing for its national brands would make them more attractive to potential buyers.