Ford Prepares to Sell Volvo For $6 Billion
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Ford bought the Swedish firm back in 1999 for $6.4 billion and after a decade, they expect to sell it with roughly the same money. Everyone can see that this is a huge amount, and the price isn't justified.
“Anything other than a heavily discounted sale seems unrealistic,” Bllomberg quoted Ferdinand Dudenhoeffer, director of the Center for Automotive Research at the University of Gelsenkirchen in Germany, as saying. “For a buyer it’s the best time that one could wish for. But it’s not ideal for Ford,” he added.
Volvo isn't quite a big seller in these times, so if you want to buy your small car manufacturing firm, you will have to have a little extra money to help it pass through the crisis. The Swedish car manufacturer reported that car sales in the third-quarter were down 24%, they cut thousands of jobs, and are seeking financial assistance from the government.
What Ford is actually selling is just a brand, because in all the other areas, Volvo isn't doing well at all. One example is the truck building business, where the Swedes announced drops in sales by 99.7%, selling only 115 trucks worldwide.
“As an overall brand, Volvo still has a lot of value,” said Pete Kelly, senior director at J.D. Power Automotive Forecasting in Oxford, England. “Its reputation for safety is still very strong. Volvo’s problem right now is that it’s very dependent on the U.S. and Western Europe, the two fastest-falling markets.”
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