Volvo Cars gains market shares
Despite desperate times for the auto industry, Ford’s Sweden-based Volvo Cars managed to increase sales and nick market shares.
| Related news: • Volvo's image at risk in Chinese hands • China's Geely is 'preferred bidder' in Volvo sale |
Ford’s Volvo unit, which is up for sale, reported a third-quarter pre-tax operating loss of $135 million, compared with a loss of $458 million a year ago, Ford said Monday.
This was the best quarter for the Gotheburg-based carmaker this year. Losses in the first and second quarter amounted to $255 and $231 million dollars.
However, Ford said the improvement was not just an effect of heavy cost reductions and favorable exchange. Despite the gloomy economic times for the auto industry Volvo managed to increase its revenue to $3 billion from $2.9 billion a year ago.
In the report Ford confirmed Geely, China’s largest private automaker, as the preferred bidder in the ongoing discussions concerning the sale of Volvo Cars.
Since Ford last week announced Geely as its first choice a growing number of critics have raised concern about the deal. A Chinese takeover could hurt the brand and image of being a safe and reliable car and suppliers in Sweden are worried that Geely may abuse Volvo’s technology.
“Big, tech-heavy suppliers are definitely concerned about China’s record when it comes to copyrights and Volvo would be in real trouble if it ends up not being a preferred customer among suppliers,” said Sven-Åke Berglie, who heads FKG, a group that represents 300 automotive suppliers, to Bloomberg. “Just as carmakers choose suppliers, suppliers choose carmakers.”
According to the news bureau, Geely is prepared to pay about $2 billion for Volvo, less than a third of what Ford paid a decade ago. Ford acquired Volvo in 1999 for $6.45 billion from Volvo AB. Volvo has lost more than $1 billion in recent years.
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Last Updated (Monday, 02 November 2009 15:36)
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