View all newsletters
Receive our newsletter - data, insights and analysis delivered to you
  1. News
May 20, 2008

ITALY: No surprise Ford cutting Volvo output – analyst

Morgan Stanley’s head of automotive research believes it is no surprise that Ford’s Alan Mulally is trimming output at its Volvo Cars unit.

Morgan Stanley’s head of automotive research believes it is no surprise that Ford’s Alan Mulally is trimming output at its Volvo Cars unit.

Adam Jonas told delegates at Automotive News Europe’s Congress in Turin that Volvo is being hit by adverse currency movements and that any prospective buyer would likely face a long haul in making it profitable again.

“It’s not a surprise that Volvo production is being cut,” he said.

“A kroner- and euro-based cost base alongside dollar revenues…well, it doesn’t get much worse than that and we believe that Volvo Cars is loss-making.

“Ford has made its intentions very clear: Volvo is not a part of the Ford core. The question is, who would be a buyer? Whoever it is ought to have a very long time horizon, be prepared to invest a lot of money and absorb losses for the next three to five years if currencies stay where they are.

“But that Volvo brand definitely has value and there’s a scarcity of brands that have that sort of value in the market. They’ll find a home somewhere.”

Dave Leggett

NEWSLETTER Sign up Tick the boxes of the newsletters you would like to receive. The top stories of the day delivered to you every weekday. A weekly roundup of the latest news and analysis, sent every Monday. The industry's most comprehensive news and information delivered every quarter.
I consent to GlobalData UK Limited collecting my details provided via this form in accordance with the Privacy Policy
SUBSCRIBED

THANK YOU

Thank you for subscribing to Just Auto