While parent Ford Motor Company prepares to announce a $US900 million loss for the fourth-quarter of 2001, its Swedish Premier Automotive Group subsidiary, Volvo Cars, is set to contribute record profits of 7.2 billion Swedish kronors ($US693 million) to the US car maker, The Financial Times says.
The FT said that Volvo, bought by Ford in 1999 for $US6.45 billion, boosted profits last year by almost 15 percent on sales of SKr130 billion.
The Swedish operations, acquired by Ford for $6.45bn in 1999, saw profits rise almost 15 per cent last year on sales of SKr130bn.
Volvo chief executive Hans-Olov Olsson told the FT: “2001 was another record year. We are on the right track building consistently on our performance.” He added that the 2001 results had been boosted by favourable exchange rates and hinted that there would be more component sharing with Ford plus the pooling of distribution and logistics operations with Ford in Europe.
This follows previous annoucements that the US operations of the PAG companies — Land Rover, Lincoln, Volvo and Aston Martin — would share a new Irvine, California, head office building and pool some ‘back office’ functions such as vehicle and parts distribution and retail financing.
Olsson, meanwhile, told the FT that Volvo had already delivered savings of more than $1 billion by integrating its purchasing with Ford.
Olsson, the FT added, confirmed that Volvo, which is rumoured to be planning a competitor for Volkswagen‘s Golf, is undertaking a study, due to be completed this year, that could lead to further growth beyond the current target of boosting annual sales from 420,000 to 600,000 in the medium term.