Press Rumors Drive Volvo Sale Speculation

31 May 2007

DEARBORN, Michigan: With UK-manufactured Aston Martin luxury marque safely disposed of for £479 million ($924m; £701.9m), the struggling Ford Motor Company is rumored to be considering putting its Volvo division on the auction block.

Reports in a Swedish newspaper suggest the US automaker has been talking to German giant BMW about a possible sale - speculation Ford has denied.

In a statement it said: "Ford Motor Company is not in discussions with BMW or any other company regarding an interest in the Volvo Car Corporation."

It added wryly: "We have seen this kind of speculation for the past year."

The company is seeking to turn round last year's record $12.6 billion loss and to bolster its flagging North American operations.

Ford bought Swedish-headquartered Volvo in 1999 and the luxury marque is part of its Premier Automotive Group, which includes Jaguar and Land Rover. Volvo is the most profitable of these brands, with estimated earnings of $260m last year.

Merrill Lynch analyst John Murphy believes a combined sale of Jaguar and Land Rover could raise up to $1.5bn for Ford, while the sale of Volvo would achieve around $8bn.

Data sourced from Wall Street Journal Online / Reuters; additional content by WARC staff