Blog: Dave LeggettVolvo and Changan?

Dave Leggett | 9 December 2008

Would Volvo Car look attractive to a Chinese car manufacturer? You betcha. As Tata did with Jaguar Land Rover, you effectively put your global strategic development on fast-forward by acquiring an established Western automaker - especially if it comes with a respected prestige brand. There's all that deep engineering knowledge, off-the-shelf products and major component systems, distribution networks and manufacturing plant assets to think about for starters.

And Volvo ought to be eminently turnaroundable (is that a word?), financially. The purchase price might be a slight sticking point though. And even the Chinese are likely to be a bit cautious at the moment, a downturn of uncertain magnitude on the cards for the Chinese economy and vehicle market.

The Changan news flurry is a curious one though. So, Ford thought it should tell its Chinese partner Volvo is for sale as a matter of 'courtesy'. Really? That's very polite indeed, isn't it? Because that's how Western automakers are with their Chinese partners generally - they have super-respectful and trusting relationships with them and tell them everything, naturally, I don't think. It wouldn't be a huge leap from that 'courtesy' to 'we'd welcome any thoughts you may have on this matter'.

And the subsequent media fallout and 'misreporting'? Well, it will be picked up especially keenly in Sweden where there may be some potential investors in Volvo who are hanging back at the moment, but nevertheless not exactly thrilled at the idea of a Chinese owner for the venerable Swedish car brand sucking it dry. And one word is guaranteed to get them going: Rover. This Changan talking to Ford about Volvo story might well flush those reluctant Swedes out, with wallets.

Is someone at Ford playing at the black art of media manipulation? Just a thought.

CHINA [updated 13:15GMT]: Ford denies Volvo sale talks with Changan


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