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SAAB

Ford values Volvo at $6 billion: report

Ford has said it wants to sell Volvo Cars for $6 billion, just shy of what the US carmaker paid when it bought the Swedish company a decade ago.

Published: 4 December 2008 16:00 CET

Citing sources with knowledge of the situation, the Bloomberg news agency reported on Thursday that Ford had retained JPMorgan Chase to advise it on the deal and hopes that the strength of the Volvo brand will attract a number of bidders.

But Ferdinand Dudenhöffer, director of the Center for Automotive Research at the University of Gelsenkirchen in Germany told Bloomberg that it was unlikely Ford would get as much as its asking.

“Anything other than a heavily discounted sale seems unrealistic,” he said, adding that plausible bidders include Chinese automakers or buyout firms.

While many have speculated that French carmaker Renault could be a potential buyer, spokesperson Frederique Le Greves told Bloomberg that Renault isn’t interested in purchasing Volvo.

Dudenhöffer also speculated that the Swedish government may call up on the Wallenburg family to serve as “a possible savior” of the Swedish car industry.

He suggested that the Wallenbergs could be a potential buyer for Saab, which General Motors says it plans to sell as a part of its restructuring efforts.

Dudenhöffer pointed out that the Wallenbergs family holding company, Investor AB, sold the Swedish automaker to GM between 1989 2001.

VOLVO

Sweden’s Volvo regains strength after pandemic puts brakes on earnings

Swedish truck maker Volvo Group was hit by a sharp drop in earnings due to the coronavirus pandemic, but business rebounded at the end of the year.

Published: 3 February 2021 12:21 CET
Sweden's Volvo regains strength after pandemic puts brakes on earnings
Volvo Group CEO Martin Lundstedt. Photo: Adam Ihse/TT

In 2020, the group saw “dramatic fluctuations in demand” due to the Covid-19 pandemic, chief executive Martin Lundstedt said in a statement.

For 2021, Volvo raised its sales forecasts in its trucks division – its core business – in Europe, North America and Brazil.

However, it said it also expected “production disturbances and increased costs” due to a “strained” supply chain, noting a global shortage of semiconductors across industries.

The truck making sector is particularly sensitive to the global economic situation and is usually hard hit during crises.

In March, as the pandemic took hold around the world, Volvo suspended operations at most of its sites in 18 countries and halted production at Renault Trucks, which it owns, in Belgium and France.

Operations gradually resumed mid-year, but not enough to compensate for the drop in earnings.

With annual sales down 22 percent to 338 billion kronor (33.4 billion euros, $40 billion), the group posted a 46 percent plunge in net profit to 19.3 billion kronor (1.9 billion euros).

Operating margin fell from 11.5 to 8.1 percent.

However, the group did manage to cut costs by 20 percent.

“We have significantly improved our volume and cost flexibility, which were crucial factors behind our earnings resilience in 2020,” the group said.

Volvo's business regained strength in the second half of the year.

“Customer usage of trucks and machines increased when the Covid-19 restrictions were eased during the summer and this development continued during both the third and fourth quarters,” it said.

“Both the transport activity and the construction business are back at levels on par with the prior year in most markets.”

For the fourth quarter alone, the company reported a 38-percent rise in net profit from a year earlier.

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