Wednesday, December 23, 2009

Volvo Sale A Safe Bet

Ford is selling the Swedish car manufacturer Volvo, which it bought for $6.45 billion in 1999, to the Chinese auto company Geely for a about third of what Ford paid for it. Volvo has been losing money lately, and Ford is focusing more on its namesake brand both in North America and Europe. Ford will still have a stake in Volvo, though; much of the technology and safety features Ford and its Swedish subsidiary have developed is included in Ford vehicles, so it will be able to continue to share components with Volvo for awhile.
It's a win-win situation for everyone, helping Ford becoming a leaner company while allowing the continued collaboration with Volvo and allowing the Volvo brand to be introduced to Chinese consumers.
To those auto enthusiasts who see this deal as the automotive equivalent of dipping herring in sweet and sour sauce, put a Swedish meatball in it. Volvo is a brand with a long and honored tradition of making the safest cars on the planet (not necessarily the most durable cars on the planet anymore, but that's another story). I'd rather see a thriving Chinese-owned Volvo company than a dead Swedish one. Didn't you hear about Saab? :-(

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