Bailout Watch 416: Volvo Breaks Ford's Bailout Chery
Automotive News [sub] reports that the Swedish government is setting up the bailout smorgasbord for Volvo.
Sweden’s Industry Ministry state secretary Joran Hagglund said the government is due to approve an application from Volvo Cars likely to be filed to the European Investment bank (EIB) next month, financial daily Dagens Industri reported.
The government would guarantee 90 percent of a 5-billion-kronor (573 million dollar) loan, Hagglund said.
The remaining 10 percent would be secured from other sources.
Don’t look at me. So why is Sweden happy to go to serve-up plates of köttbullar for Volvo, yet won’t touch Saab with a ten foot stolpe?
Unlike GM, Ford has clearly stated they will take full ownership responsibility and guarantee capital flows to Volvo Cars until they have found a new owner for Volvo Cars,” Hagglund was quoted as saying.
In other words, Ford’s willing to put up the same amount of kronor again to cover Volvo’s on-going losses—until they can find a [Chinese] buyer. Or not.
FYI, “Volvo suffered a disastrous 2008 with a pre-tax loss of $1.46 billion. The brand’s global sales in 2008 were 359,000 units, down from 482,000 in 2007.”
More by Robert Farago
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volvo is an excellent car. the only major problem with the brand is that their models are overpriced by at least 20%. that's probably a function of exchange rates and paying volvo workers a living wage. this puts them in competition with audi & bmw. they need to price volvo in acura territory if they want to compete. as a used car, they are a very good value. when i bought my used v70 the price was slightly above a comparable passat wagon and slightly below a used outback. imho, it's much better than both of them. my one criticism is that they've gotten overpowered and too gadgetty. nobody i know who drives one is interested in the larger engines that volvo has crammed in (sorry but piston heads are not the target audience).
I'll echo the "great used car" buy statement. Got my S60 as a 2 year old car with 34K on it, and got it very, very reasonably. It is a quality vehicle.
Volvos are expensive, even compared to Acuras. The Acura TSX is a better buy versus the Volvo S40.