Chinese Chery eyes Volvo bid
Author: Robin Brown
Published: 14 July 2008
Chinese automaker Chery is considering a bid for struggling Volvo, according to report in Chinese state media.
A number of recent reports have suggested that Ford is considering selling the premium Swedish marque as it struggles to compete in the North American market due to the weakness of the dollar and high price of exporting to the States.
Chery has denied considering any bid for Volvo, but a report in the Caijing business magazine quoted an insider claiming that Chery is seeking to raise equity for a bid.
Chery is state-owned and will have to apply for permission from the government of Anhui, the company's home province, if it is to pursue a takeover.
As recently as last year Volvo was valued at £8bn, but tumbling sales and rising oil prices are likely to have slashed that figure. Sources in industry estimate that it would cost Chery 30bn Yuan - around £2.2bn at current exchange rates.
Industry insiders estimated that Volvo could cost Chery more than 30bn yuan, it said.
Shanghai Automotive Industry Corporation - which owns the rights to MG Rover - has also been linked to Volvo. Ford has repeatedly denied that it intends to sell Volvo, but reports that the Swedish manufacturer is being primed for a sale have persisted.
The potential move echoes Indian Tata Motors' recent takeover of Jaguar and Land Rover - also previously owned by Ford - as developing manufacturers whoa re better able to exploit cheaper costs look to expand their expertise, technology and market penetration by taking voer previously Western brands.
Ford has announced the sale of Jaguar and Land Rover to India's Tata Motors, confirming one of the worst-kept secrets in automotive history.
Volvo's Fredrik Arp will make way for Stephen Odell as Ford wields the knife in an attempt to reverse recent decline at the Swedish car-maker.
New police spec Volvo V70 up and running to serve forces across the UK, as traditional law and order takes on board new procedures for 2008.
The Volvo XC70 and XC90 won two accolades at 2009 4x4 Magazine awards, fighting off over 70 competitors.
Volvo has the most user-friendly site of all car manufacturers, according to customer experience benchmarking company Global Reviews.
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