Today, sources confirmed that Chinese automaker Chery Automobile has expressed interest in purchasing Volvo Cars from Ford Motor Company. Currently in the midst of staving off a financial catastrophe by implementing an aggressive restructuring program, rumors that Ford might be placing Volvo on the chopping block began to circulate late last year after published financial reports made it clear the Swedish subsidiary was weighing them down. Although Ford has yet to either confirm or deny that such rumors are true, a spokesperson for Chery Automobile told the press that the severe economic downturn has created a unique buyer’s market, as well as the opportunity to boost brand integrity with the addition of a solid, reputable European brand.
Unfortunately, Chery’s current portfolio falls short of providing the purchasing power needed to cover Volvo’s $6.4 billion price tag, ultimately suggesting that Chery might need to re-evaluate their earlier interest in Saab. In terms of strategy, Nomura International industry analyst Yankun Hou explained that Volvo would be safer, potentially more profitable bet for Chery, but it may be out of their reach. Said Hou “Volvo is the most solid brand compared with other brands the Detroit automakers have put up for sale…The price tag could be too high, but it could be a big help for Chinese automakers who lack core technology but seek to climb up the ladder.”