Daimler will not buy Volvo from Ford
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The German car giant Daimler is not interested in acquiring Volvo cars, put up for sale by Ford. Ford, along with its rivals General Motors and Chrysler, is trying to survive a deep downturn in US vehicle demand.
AFP - German car giant Daimler has decided not to buy Swedish-based Volvo Cars from ailing US Ford, according to the weekly Der Spiegel's upcoming edition.
"Daimler boss Dieter Spiegel has carried out a close examination of a possible purchase in the past few weeks and acknowledged a series of possible drawbacks," the German weekly says.
Ford Motor Company said at the beginning of last month that it was reviewing strategic options for Volvo Car Corporation "in response to the significant decline in the global auto industry particularly in the past three months and the severe economic instability worldwide."
Ford said the review probably would take several months to complete, adding that it would continue to work closely with Volvo Cars, which is restructuring "to operate on a more stand-alone basis" under chief executive Stephen Odell.
Der Spiegel said Daimler's great rival BMW had also turned down the chance to take over Volvo, leaving Ford with little hope of finding a buyer, though it mentioned China's Changan as a possibility.
According to Der Spiegel, Daimler foresaw problems with harmonising Volvo parts and practices with its own prestige Mercedes cars, which would require substantial investment and small return.
Ford bought Volvo Cars in 1999 from the Volvo group for a hefty 6.45 billion dollars.
Volvo Cars sales peaked in 2000 at a record 422,100 units, according to Ford.
Odell said in Ford's statement last month, "We have a strong brand presence in Europe, North America and the Asia Pacific region, and are growing in key markets such as China and Russia, where we are the leading premium brand," Odell said.
However, car sales have slumped in the United States and Europe amid the global financial crisis that erupted in August 2007.
Volvo Cars has announced thousands of job cuts worldwide since June, most of them in Sweden.
Volvo Group chairman Finn Johnsson recently told Swedish financial daily Dagens Industri that his company was not interested in buying back Volvo Cars, and the Swedish state has also ruled out acquiring it.
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