BMW to Buy Volvo?
We were promised that Volvo would not be sold. It appears, however, that like much in the auto industry recently, that was just a little white lie. Recent reports of talks between BMW and Ford suggest that the Bavarians who sold Land Rover to Ford a few years ago may be seeking another project.
Ford’s financial woes seem to continue even though they’ve been cutting costs left and right. With the sale of Aston bringing in $925 million, according to reports, Ford is contemplating selling off the rest of their Premier Automotive Group (which has been valued at over $9-billion). The group, which includes such icons as Jaguar and Land Rover, is also home to Swedish Safety gurus, Volvo.
However, Volvo may not be up for the fight that Ford is asking of it. Reports of talks between BMW and Ford suggest that the Germans may take it over as early as next month.
Maybe that YCC concept will finally hit the streets?
EDITOR'S NOTE: Volvo, which has been under Ford's purview since 1999, is perhaps the most integrated of Dearborn's premium marques in that it shares more unseen bits with other brands under the Blue Oval's umbrella than its PAG stablemates, making it trickier to sell off. Whereas relatively little hardware from Aston Martin or Land Rover can be found under the hoods of other Blue Oval properties, Volvo's partsbin is markedly more universal. The S40 is based on the same architecture as the Euro-market Focus and Mazda3, and derivations of Ford's D3 chassis rides 'neath the S60, S80, and XC90 as well as the Taurus/Taurus X/Mercury Sable trio. And it isn't only platform sharing - much of Volvo's safety knowhow has been deployed throughout the Blue Oval empire. In other words, selling off Volvo is going to be tough.
What do you think... is selling off Volvo a good idea for Ford, or is it a sign that the wheels are coming off? Have your say in 'Comments.'
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Comments
The Stig
I really don't know why BMW would be interested. They are doing fine without them, and it seems odd that they would be interested after the fiasco of buying and subsequently dumping Land Rover. It makes sense for Ford to sell off Volvo though since they are fighting for their lives and need to raise some cash, especially since Ford seems to understand that they need to retrench a bit.
J Lombard
I guess I'm a little unclear on what BMW would need Volvo for, unless they wanted a platform (or three) to share. BMW already has a decent name in safety, and their X-drive AWD systems are certainly not far enough behind where catching-up would require buying the Swedish automaker.
George
I think Ford is on the same slippery slope that Chrysler was in and they too will be on the way to another life, therefore they will sell everything that is not tied down. So why not sell Volvo to BMW?
Tom McIntyre
What does BMW gain?
Sounds like British Leyland/JRT/Rover (or whatever that mess they last bought was called) all over again. Ford has watered down and homogenized all value out of Volvo over the last few years. There is no "there" there.
Reilly Brennan
I agree with Tom McIntyre. I don't see how BMW gains. Unofficially most people think BMWs are safe, even if it isn't one of the main reasons they buy BMW's cars and SUVs.
mo
I don't think BMW has any profit with getting a luxury brand. even if BMW enhanced Volvo, the latter will compete with BMW sales which is not good.
as I can see from the comments above, most people believe that ford put Volvo value down, but I personally don't think so. I think volvo's value went down because nowadays each manufacturer puts saftey among the most important features when doing anything with a car. when we see hyundai's getting 5 stars in crash tests and beside it a volvo getting the same ratings, consumers are awared. I personally don't believe that volvo is the safest car in the world any more.
In addition, volvo did not try to make their brand attractive nor sporty. all volvo's are boring, while companies like buick and toyota are trying to get out of the boring companies list (buick might give a rear wheel drive full size sedan based on holden, while toyota might give a new supra), volvo attempt was only by giving a V8 S80 which is not quite sporty.
Bob Martel
I don't beleive the rumor. As you guys indicated in the Editor's Note, the Volvo, Ford and Mazda platforms are tightly knit, and as the other contributors point out: "what's in it for BMW?"
Iain
I agree with all the other comments here but for a slightly different reason. My father owned about 12 Volvos in his life and loved them. So when my wife wanted a kid wagon, we looked at a V70 T5 (I needed the turbo :)) and bought one.
It was a disaster. After 18 months of continual problems with coolant leaks, they finally found a crack in the engine and replaced the engine - just as the car was coming off warranty.
Now, I know these stories can be told about many cars, including BMWs. But it was Volvo NA's reaction that got me - I called them to see about an extended warranty, since we were still having problems and had complained about the original leak at 20k miles. Their answer: "that is not our problem". Eh? They said it was between myself and the dealer and not the problem of Volvo!!
Everyone I tell this story to has one thing to say: "well, they are owned by Ford".
I currently have a BMW and have been happy with the service/deal.financing/support/etc. So, WHY does BMW want Volvo? They may as well buy Mercury...
Doug
i think that the loss of volvo will remove alot of know-how from the ford portfolio. I hope that they dont sell volvo.
Don
Perhaps it's just to kill a competitor?
mike
bmw wants a position to make gains the 'entry level' luxury market. a 3 series is not inexpensive enough, and the rumored 1 series may end up devaluing the brand (the reason mercedes-benz pulled their hatchback model)
however, volvos can be sold at cheaper prices and would do well in the entry level luxury market, while BMW itself would still be the ultra expensive and exclusive brand it wants to be. also i read that BMW was interested in making its investments in the mini (front wheel drive) more profitable by using the same platform across more vehicles. the platform for the mini could be stretched for compact volvos.
krew
I think it makes sense for BMW. Like mike above says, they run the risk of diluting their brand if they want to continue travelling down market.
Volvo would give BMW access to an established brand with a different market segment, allowing for growth without real sacifice to BMW themselves.
I mean, that's why car companies have different marques, right?
(Plus I'd much rather have a BMW built Volvo than a Ford one.)
Gav
Why are they going to buy Volvo. One word. Mini. Even though they seem to be doing ok with the brand it looks like for them to properly develop the Mk3 Mini they're going to need a parter with lot's of FWD knowledge, and maybe a company with a shoe in to the Ford parts bin. Now I'm only speculating this, but I'd guess even if they did buy Volvo, Volvo would still quite happily share it's platforms with forthcoming Fords and BMW would get the next fiesta platform and engines for the Mini. In fact it already uses a PAG/Ford engine.
rick
Being owned by ford has been the worst thing for volvo. As a premium brand car company, we should not be available as a fleet car...it de-values the brand. Our margins have been cut, and I can only wonder where the cars have been de-contented beyond where I can see. The ford guys need a lesson in economics 101. If the supply goes up, and demand stays the same, what did they think would happen to the value? I've been selling these cars for 7 1/2 years, and every year I see fewer and fewer previous owners returning to the brand. Leave the fleet sales to lincoln mercury
B
I think BMW is doing just fine with MINI as is. I don't think the BMW 1 series will devalue BMW in anyway because it fits their image. Mercedes Benz image is different.
LL
I'm not sure about the Mini angle here... BMW has been experts in suspension tuning for performance and balance, not to mention engine design -- which is why the Mini brand has done so well. As far as the new Mini engine is concerned, it's really a BMW-designed engine with PAG's involvement more in the manufacturing side of things. As a result, in terms of Mini, I don't think having Volvo under BMW really have any value.
As far as brand image -- the premium brand image of BMW is only prevalent in the U.S. In europe and other parts of the world, BMW has several models (including the 1 series) in the low end markets, which, IMO, don't really tarnish the brand image of BMW any more than the inclusion of Mini in its U.S. product offering has done.
So, I'd echo opinions of many here in saying that Volvo doesn't really offer much (if any) value to BMW
J. Jones
BMW need to remain competitive in an already difficult market place, hence the need to source new ideas - and a means to revive Mini sales. Buying Volvo may not be a good idea but that was also said about Rolls Royce - look at it now. Volvo have something that interest BMW. And let's face it, Ford have a real cash flow problem and have very little money to invest in all the car companies it owns. Like Aston Martin selling Volvo maybe something Ford does not want to do, but may have to inorder to survive long term.
Daniel
BMW wants Volvo not for platforms or technologies, they want it because it is a profitable company whose products atract another market segment besides their own.
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