Volvo Close To Consumating Marriage– Any Marriage

Ford’s Volvo has been on the block–excuse us, “strategic review”–for a while now, both unofficially and officially. So far, the flirtations with possible suitors resembled dating tours to the Philippines or Russia. A little petting, and then nothing. Now, finally, there are indications that the dalliances may enter the terminal phase: Either Ford gets a signature from a willing buyer or Volvo will be terminated. Extra urgency has no doubt been lent by the Swedish government which told GM (and by implication, Ford) not to expect a single öre, and to get on with it, or get out.

The Swedish paper Dagens Industri yesterday carried a report that there are four serious suitors for Volvo: China’s Changan, China’s Dongfeng, and–surprise–France’s Renault. As the dark horse, there is an ominously unidentified suitor. For those who have a problem understanding Swedish, Bloomberg carries a pretty good summation of Dagens Industri’s report. Ford and Volvo met with their investment bankers in London this past week, and the candidates were deemed “serious” enough to be allowed to see confidential information about future Volvo Cars models, says Dagens Industri.

As reported by TTAC, the unidentified suitor might be China’s Chery. Quite tellingly, China’s Gasgoo (a company owned by Chery, run by their former purchasing director) has been keeping “ Chery Auto possible to buy Europe car brand” [sic] as its top story for days.

If we are to place odds, Renault should be the odd man out in the game. There are no obvious reasons why they may need Volvo, but there may be not so obvious ones. It’s possible that Renault is there to create the impression on China that there is demand elsewhere.

The most logical partner would be China’s Changan, as they are already Ford’s joint venture to make Volvo cars for China. Then there may be other goings-on in China, which don’t make the press.

For a Chinese manufacturer, a brand such as Volvo would have the most value. An established brand, especially one with a strong safety cachet, might perform miracles on Chinese export offerings, give it credibility and erase mental images of Chinese cars failing in crash tests.

Or not.