China Buyout Watch: Geely's Turn For Volvo?

Bertel Schmitt
by Bertel Schmitt
china buyout watch geely s turn for volvo

Volvo is Latin for “I turn” (as in “revolving credit” of lore, or as in “revolver” for people who can’t get one.) Nomen est omen: Never has the word been truer than now, as the formerly glorious Swedish brand is being offered-up for a gang-bang.

From day one, TTAC chronicled the trials and tribulations of the D2.8 to sell as many brands a possible to the highest bidder. The news cycle on that is predictable. We report it. They deny it. Pom-pom waving bloggers drop their cheer-leading acoutrements for a second, wave the denials, and call us idiots. Shortly thereafter, The Truth About Cars offered to India and China comes out, usually by way of the Indians saying that they don’t have the money, or the Chinese saying that they looked and lost interest. All while Detroit denies that anything of that nature may be going on.

At least, the last part changed. Two days ago, motor-mouth Bob Lutz admitted what he had denied weeks before: GM brands such as HUMMER, Saab, Saturn are on the block. Excuse me, they are “under strategic review.” Yesterday, Ford’s Mulally confirmed what TTAC B&B had known for a while: Volvo is for sale.

Well, of course Mulally didn’t say it so crudely. He said “Ford is considering strategic options, right now,” Reuters reports. What’s with the “strategic options” talk? Are they peddling launch codes for ICBMs? Why is it so hard to say: “We are looking for a buyer?” That’s what you learn on your first day as a salesman: gotta ask for the sale. Maybe, that’s why they aren’t selling. “Boy, do I have a strategic option for you” doesn’t seem to have the right ring to it.

Double-speak or not, Mulally “expects lots of interest in the brand.” Maybe Mulally had one too many, or he was under a lot of stress (waiting for news from DC does that to you,) but his next remarks drifted into never-never land, into the DMZ of strategic options, so to speak: “I think that even though times are tough, there are a lot of people who would love to have that brand. Even though it is tough it’s going to work out okay.”

Isn’t it refreshing when people can verbalize clearly where they stand, strategic options-wise?

As for the lots of people who would love to have that brand, we agree. A lot would love a Volvo. When you bring in the nasty factors of having the money to buy the brand, not to mention an acquisition that makes sense, the number of suitors gets a bit limited. The Europeans have their own problems. The Indians likewise. There is some interest in China, amply documented by TTAC. Prime suspect is Changan in China, who’s stock had been placed on halt pending announcements a day after the story of their interest in Volvo had hit the wires.

The Brit blog doesn’t want to be left out in the Volvo debate. They found their own Chinese car maker who’s supposedly waiting for his turn to do Volvo: Geely.

“Autocar has learned that rival Geely Automobile has shown interest in a controlling stake in the Swedish brand,” they blog. And how did this interest manifest itself? “Geely personnel initially visited Volvo’s headquarters in Gothenburg in early 2008. At the time, Geely was unprepared to pay the $6b that Ford was asking for Volvo. But with Ford insiders now suggesting that Mulally is prepared to offload Volvo at a significantly lower price, talks between the two car makers have restarted.”

If that’s the proof, then it’s old hat.

Gang-bangs can get a bit sticky, and Autocar found a gooey spot: “One of the sticking points for any deal with a Chinese maker is the intellectual property agreements concerning the Ford-based platforms on which Volvos are based. Autocar sources say any buyer would be prohibited from using these platforms for any other brand.”

Not necessarily so, depends on the contract. Many Chinese home-growns are based on a platform bought from abroad. Another wet spot may have been overlooked: Changan. They are in a joint venture with Ford to build Volvos for China, and they are busy expanding their line-up. They may have to be asked what they think of a Geely-Ford-Volvo affair.

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  • Porschespeed Porschespeed on Dec 17, 2008
    Gang-bangs can get a bit sticky, and Autocar found a gooey spot: “One of the sticking points for any deal with a Chinese maker is the intellectual property agreements concerning the Ford-based platforms on which Volvos are based. Autocar sources say any buyer would be prohibited from using these platforms for any other brand.” Given the Chinese record of compliance with IP laws in general, I hardly see this as a stumbling block. American companies (especially automotive) are horrible about this too, but usually they are stealing from another American, and eventually somebody gets paid, albeit poorly, in court. Just to continue the analogy...Regardless of the 'IP agreement' if it goes to the Chinese, that platform will get as big a workout as a hooker that looks like Sara Palin at a Southern Baptist preacher convention.
  • Psarhjinian Psarhjinian on Dec 17, 2008

    ...and, top of the list of "Ten Phrases You Will Never See in Mainstream Journalism" is:

    Gang-bangs can get a bit sticky, and Autocar found a gooey spot
  • Inside Looking Out The next 4Runner will be BEV.
  • The Oracle This is a proper Italian red sauce turd.
  • Carson D This isn't a notice of a wait time for 4Runner fans. This is a deadline for the opportunity to buy one new before they're gone. Whatever comes next, there is no possible way that it will be as good at doing 4Runner things as what is available today.
  • Bkojote There's a lot "just right" with the current 4Runner, and having spent time in more contemporary equivalents for road trips, I completely understand why they sell a ton of these.Here's some topics that aren't super common among 4runner owners - excessive carbon buildup in the engine after 40,000 miles (Audi/VW), bent valves (Bronco) , failed oil coolers (Jeep), cracked engine blocks (Jeep), dead vehicles from OTA updates (Chevy Colorado), being stranded due to opening the door too many times (Defender), malfunctioning engine sensors (Defender, VW), dead batteries due to electrical system malfunctions (Jeep), unusable defoggers (Jeep), waiting for seat heaters to boot up (Subaru), randomly catching fire (Kia/Hyundai), crappy build quality (Ford, Tesla).The interior feels solid and rattle free, and everything feels substantial in the way a Jeep Grand Cherokee or Kia Telluride does not. 14 year run means accessories are plentiful and well sorted. The control inputs from the radio to heated seats to climate control work better than 99% of the cars you can buy new at this point and are dead simple and ergonomically satisfying. Even dynamically (I drove a model with the KDSS system to be fair) it is a surprisingly composed vehicle on mountain roads- it's far more civilized than a Bronco or Wrangler, and hell, it was far more pleasant than the past two peastant-grade Benz crapmobiles I've been in.So I get it- car journalist rags whine about how overly complicated and tech-heavy modern vehicles are while their substance is cost cut, but here's the literal definition of 'don't fix it if it aint broken.' . It's a trusty Ford Econoline in a world of craptastic Ram ProMasters.
  • Frank Sounds like they dont want to debut it at the same time as the new Land Cruiser, which is probably smart. The new 'runner is ready to go I am told, so there's a reason for this delay.