Check Your Mirrors

Odds and ends about cars and the car business

By Autosavant staff writers

10.28.2008

BMW and Ford in Talks regarding sale of Volvo – London’s Sunday Times reported that Ford is in talks with BMW about the possible sale of Volvo. Such rumors also surfaced earlier this year, though they were quickly discovered to be unfounded.

From Ford’s perspective, the main reason behind the sale would be to raise cash, which has lately become a popular reason for US automakers to sell their assets. Sources close to both automakers indicated that talks have taken place, though a BMW spokesperson flatly denied the suggestion.

Reports from Göteborg in the past several months have shown there to be low morale among factions within Volvo, and many Volvo employees would like to see Ford sell their company. Since BMW is known for manufacturing high-quality cars which are enjoyable to drive, many Volvo enthusiasts would love to see the Swedish brand under the BMW umbrella, with the hopes that such a union would lead to Volvo vehicles capable of shaking the brand’s stodgy image.

VW hints that the Scirocco may be sold in the US – After reversing itself on this issue several times, VW is now saying that the new Scirocco may show up in the US after all, and as early as 2009 calendar year. The main issue holding the Scirocco back previously was the negative dollar/euro valuation, and that has largely mitigated itself as a result of recent market conditions. If the Scirocco does get sold here, it will be higher-priced and higher performance than the GTI so as to not cannibalize sales from the current VW performance icon. The appearance of the Scirocco after a 16-year absence would be warmly greeted by performance enthusiasts in the US.

Chevrolet GPiX Concept – General Motors today revealed the Chevrolet GPiX crossover coupe concept at the 25th Sao Paulo International Auto Show. The concept vehicle was developed by General Motors Design in Brazil and represents a potential new segment for GM in the region.

The GPiX concept features a two-door body style with high ground clearance appropriate for the types of roads and conditions found in emerging markets. “It offers the sporty design and versatility necessary for a country with the continental dimensions of Brazil,” said Carlos Barba, General Director of Design for GM Latin America, Africa and Middle East.

The front end of the GPiX Concept is highlighted by the famous Chevrolet gold bowtie in the front grille and LED headlamps. The 17-inch mixed-use wheels and tires add a rugged look to the crossover coupe. A panoramic glass roof provides maximum light in the passenger compartment and increases the sensation of space.

The GPiX concept stands out even more for its versatility and technology. Its interior is functional with seating for four. All seats fold and the floor panel is flat, which increases spaciousness.

The instrument panel has a modern design, with easy-to-read digital displays. The multifunctional steering wheel has a completely new design and is made for total driver-car interaction. The driver can easily use the connectivity and entertainment systems available, such as Bluetooth, hand-held computers, CD player and MP3 player, among others. The GPiX also includes features that customers have come to expect in production Chevrolet vehicles offered in Brazil, such as air conditioning, power steering and power windows.

The DOE may release $5 billion USD to GM early – GM will then use the money to help finance their acquisition of Chrysler. The DOE (Department of Energy) approved $25 billion in loans for the Detroit 3 last month (ostensibly for retooling) but the chatter in Washington and Detroit now is that the DOE might be able to be sweet-talked into relasing $5 billion of GM’s share of the loan proceeds early so that GM can buy Chrysler. If the DOE doesn’t go for this, Plan B is rumored to be a direct request to the US Treasury Department for a $10 billion disbursement to be shared between GM and Chrysler, which will enable the acquisition.

The NADA projects that around 700 new-car dealers will go under in 2008 – NADA (National Automobile Dealers Association) estimates of around 700 dealers going out of business in the US this year are starting to look a little low at this point. The NADA says that represents 37,100 jobs, a piece of the economy that the US can ill afford losing. The reasons for the dealerships closing are multiple, but the two main reasons do not vary: 1) lack of inventory financing (called floorplan in the industry), and, (2) lack of buyers in this down year of sales. With many analysts saying 2009 will see even less buyers than 2008, and the commercial credit crunch showing no signs of abatement, the dealers in trouble (mostly domestic ones) are deciding to shut their businesses down. To add insult to injury, the dealers just have to close, they cannot sell their dealerships because no one wants the business. Why would they when they would have the same problems as the guy they bought the dealership from? And if 2009 is going to be worse than 2008, how many of the country’s current 20,700 dealerships (soon to be 20,000) will be around in 2010?

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Author: Kevin Miller

As Autosavant’s resident Swedophile, Kevin has an acute affinity for Saabs, with a mild case of Volvo-itis as well. Aside from covering most Saab-related news for Autosavant, Kevin also reviews cars and covers industry news. His “Great Drive” series, with maps and directions included, is a reader favorite.

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6 Comments

  1. Ford needs to sell Volvo to BMW for Volvo’s sake. Ford is not going to have the money to fund the required R&D at Volvo for years to come.

  2. Less auto dealerships? Which means less car salesmen? Less F&I managers? Less used car managers?

    Then I’m looking forward to the future.

  3. I would have liked for Alan Mulally to have kept Aston, Jaguar and Land Rover under the Ford umbrella, but I guess he knows what he is doing.

    It makes some sense for BMW to buy Volvo. With a second major brand (Mini is a, um, mini brand) BMW gets to spread some of its R&D costs over another few hundred thousand units. Volvo will stay front-drive so as not to directly compete with BMW, but there’s no reason Volvo can’t use major pieces of BMW engineering –hell, Volvo has been known to fit an inline-six transversely in a car.

    Who knows? BMW might actually want to use the C30/S40’s C1 platform –wouldn’t that be interesting?

  4. Stéphane, I don’t see Volvo as much of an opponent to BMW, at least not in North America. I think that BMW would actually be able to take advantage of some of Volvo’s safety research and reputation. As James noted above, Volvo has been primarily an FWD (or FWD-based) automaker since the mid-1990s. And I’d love to see a BMW inline 6 in the S80/V70 rather than Volvo’s lackluster 3.2.

  5. If GM buys Chrysler they get more of the same problems they have now, unless they’re planning to get rid of 90% of the company that is Chrysler currently.

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