Sale preparations at Volvo are requiring tough action to cut costsEnlarge Photo
The strain of the current weak economy could be raising the pressure on Ford to liquidate some assets, and Volvo's brand is among the most valuable. Of course, despite the news of talks over Volvo, both BMW and Ford have denied any such negotiations, reports The Times.
Talks two years ago between Ford and BMW over collaboration with then-Premier Automotive Group brands Jaguar and Land Rover led to nothing in the end, but demonstrated that Ford may have something BMW wants, especially among its luxury brand holdings.
Last year reports circulated that BMW executives had been evaluating a possible takeover of Volvo and had even gone so far as to request copies of Volvo’s financial statements from a European investment bank. Like BMW, Volvo is regarded as a global brand but has a lot of potential for growth. BMW has always skewed its promotions towards the performance oriented crowds but has never done well in the safety and environmental stakes, something it could capitalize on with a brand like Volvo.
If BMW were to buy Volvo, it could put Volvo’s next generation of sedans and wagons on shared platforms with BMW’s lineup. Further, Volvo’s smaller car lineup could also benefit from technology shared with BMW’s Mini, another brand that executives are hoping to expand.
Regardless of the reports, BMW is likely to be treading very cautiously. Seven years ago it suffered massive financial losses when its venture with the Rover Group fell though in 1994, a mistake it can’t afford to repeat - especially not in the present economy.