March 26, 2009 2:00 am
Ford Motor said it has begun "detailed" discussions with parties interested in Volvo, which it hopes to sell for between $1bn and $2bn.
Ford gave no names of suitors for its lossmaking Swedish car brand, which has drawn tentative interest from several Chinese carmakers.
"Ford Motor has had contact with a number of interested parties who have expressed an interest concerning the future of Volvo," the US carmaker said yesterday.
"Ford has been pleased with the number and quality of these interested parties, and preliminary discussions have been held to ascertain their level of interest in the Volvo business."
It said the process would "take some time to unfold", and that it had made no final decisions on a sale.
Ford paid $6.45bn in 1999 for Volvo, which lost $1.5bn last year and is laying off about one-fifth of its staff because of sharply lower sales.
Two people briefed on Ford's plans said that it was expecting to raise $1bn to $2bn on a possible sale of Volvo, which would likely take several months to complete.
Ford secured a similar price in its sale last year of Jaguar and Land Rover to India's Tata Motors, which paid $2.3bn for the brands, a price offset in part by Ford's $600m contribution to their pension funds.
Chinese carmakers Geely, Dongfeng Motor and Chang'an - which has a joint venture with Ford - expressed preliminary interest in Volvo, people close to the sale said earlier this month.
Yin Tongyao, chairman of Chery Automobile, said last week that his company was interested in buying a foreign car brand such as Volvo, but that it was unwilling to "fight" other Chinese carmakers.
The sale faces forbidding odds as Volvo, like other carmakers, suffers its slowest sales in decades.
As Ford seeks to sell Volvo, General Motors is talking to "five to six serious investors" in Saab, which is reorganising under bankruptcy protection.
With most western carmakers avoiding acquisitions to conserve cash, China's nascent carmakers are among the only likely bidders for Saab and Volvo.
Volvo is seen as a crown-jewel asset in Sweden, and some in the local industry have expressed worries about the leakage of Volvo's intellectual property to China. Industry insiders say a Chinese buyer might be interested in Volvo primarily as a candidate for a "lift and shift" of some of its manufacturing assets or designs.
China's Nanjing Automobile - owned by SAIC - bought Britain's bankrupt MG Rover for £53m ($77m) in 2005. It now runs a rump manufacturing operation in Birmingham but makes most of its MG-branded and designed cars in China.
For political reasons, Geely is seeking a potential Swedish partner for its bid, two people close to the sale said. Geely, Dongfeng and Chang'an are not commenting on their plans.
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