Car giant Ford is tipped to sell Swedish car group Volvo

[Bud Bud]

Just read this. It appears that Volvo will be sold after all.

We all know that Ford globally is really haemorrhaging at the moment but I hope they don't implode on themselves in the near future by making bad decision today.

Car giant Ford is tipped to sell Swedish car group Volvo

17/07/2007 - Car giant Ford is reportedly putting Swedish car group Volvo up for sale as part of a move to offload the remaining brands in its loss-making European portfolio.

Volvo is believed to be joining fellow Premier Automotive Group (PAG) marques Land Rover and Jaguar on the sale block as Ford overhauls its business to stem record losses.

The Swedish brand is the flagship of Ford's PAG business and until now has thought not to be included in the group's disposal plans.

But newspaper reports on Monday suggest Ford is now considering selling all the remaining brands in its luxury PAG stable, having already sold Aston Martin last year for $US450 million ($A520.02 million).

Volvo is said to worth around $US8 billion ($A9.24 billion) - nearly 25 per cent more than the $US6.5 billion ($A7.51 billion) that Ford paid for the business in 1999.

Ford said it was not in discussions with any companies regarding a sale of Volvo but added that it was "continuing to assess all of our options" for the business.

The group's British brands, Jaguar and Land Rover, have already attracted interest from a range of potential buyers, with Ford confirming it has received approaches from a number of parties.

The group said it was "aggressively evaluating that level of interest" and is thought to have set a deadline for initial bids this week, although it has yet to officially announce its decision to sell the brands.

Private equity group 3i is one of those considering bidding for Jaguar and Land Rover, according to the Mail on Sunday.

Other private equity firms understood to be in the running include Cerberus and One Equity Partners.

Ford launched a review of the PAG business after the overall Ford group posted losses of $US12.7 billion ($A14.68 billion) last year - the largest deficit in its 103-year history.

The Premier Automotive Group almost trebled its pre-tax losses last year, from $US89 million ($A102.85 million) in 2005 to $US327 million ($A377.88 million).

Pre-tax profits at the division improved in the first three months of this year, at $US191 million ($A220.72 million) against $US129 million ($A149.07 million) for the first quarter in 2006.

Source: AAP NewsWire

[05MkIIFutura]

Mazda will prob be the only one they end up keeping because they build better cars than Ford do and make more money.

[Bud Bud]

I can't help thinking that the "now announced" closer of the Geelong engine plant and the proposed fire sale elsewhere of Ford US assets are the same thing.

Analysts considering implications of Ford without Volvo

18/07/2007 - If Ford decides to sell successful Swedish luxury unit Volvo, it could mean a lack of strong bids for its Jaguar and Land Rover units at a time when Ford is restructuring its North American operations, analysts said on Monday.

"The lack of interest in Jaguar, Land Rover and the low level of cash that would be generated by their sale have prompted Ford to consider a sale (of Volvo)," Paul Newton, an auto analyst at Global Insight, said in a research note.

Newton was referring to reports on Sunday that Ford was considering selling Volvo.

Ford does not breakout financial results of individual brands, but Volvo is widely considered to be the carmaker's most valuable luxury brand.

A Ford spokesman said on Monday the carmaker was not in discussions with any company to sell Volvo.

There was speculation in the market in May that Ford was going to sell Volvo.

The company, which lost $12.6 billion last year and has given up about 1 percentage point of US market share every year since 2000, is slashing capacity by shutting 16 plants and cutting more than 50,000 jobs under a plan it calls the Way Forward.

Ford said in June it was working with financial advisers on options for luxury brands Jaguar and Land Rover, including sale.

"It appears that it is becoming increasingly tough for the company to restructure its core US operations, and this may place further pressure on it to offload its Swedish unit," Newton said, adding that Volvo is expected to be valued at about $8 billion.

Argus Research analyst Kevin Tynan said Ford could also be looking at shoring up cash going into labour contract negotiations with the United Auto Workers union this month.

"Restructurings are expensive, especially if it's not going well," Tynan said.

The company, which expects to be profitable in 2009, has seen US sales slide 12 per cent through June this year and currently has a 16.6 per cent US market share.

The profitability of Ford's luxury brands Volvo, Jaguar, Aston Martin and Land Rover, dubbed the Premier Automotive Group (PAG), has been erratic. The group lost $327 million last year before taxes.

Ford sold Aston Martin last March for $925 million.

Analysts have said that any move to raise capital can be seen as a hedge against a slowing US auto market and the possibility of a production disruption as a result of contract talks this summer between U.S auto companies and the UAW.

Ford's larger competitor General Motors Corpsold its Allison Transmission unit last month for $5.6 billion.

Source: AAP NewsWire