Monday, April 12, 2010


volvo v70
Caijing Magazine quotes unidentified sources as saying Chinese automaker Chery is looking for bank and equity investor help for a possible bid for Volvo, Ford’s Swedish nameplate.

Hmmm. Chery has not exactly been a good judge of opportunity, talent or value up to now. And this deal, if true, is no exception.

Chery is known for its obstinate, unbending, mercurial ways of doing business with Westerners. Just ask the folks at Chrysler who have been trying to get a small car program off the ground with the company. It’s aborted foray into the U.S. via a deal with Malcolm Bricklin speaks for itself.

It will take, I’m guessing, something like $4 billion-plus to get Volvo away from Ford. And then, you have some pretty dug-in, obstinate Swedes to deal with. You want to know how tough to work with? Just ask the Ford people who have been trying to wring costs out of that unit for the last eight years. Saab workers, I think, may be more flexible to do a deal on labor costs and rules with Chery knowing the company is not going to be as bendable as GM has been.

If Chery really wants to buy into the West, it should try and take advantage of General Motor’s neediness right now. Make GM an offer to take Saab Cars off the automaker’s hands. No money changes hands. And offer them $1 billion for the Buick brand or Pontiac brand. Why Buick? Buick is huge in China. Go figure. Yes, the joint-venture GM has in China is with Chinese automaker SAIC, so that might be a stumbling block. But Pontiac could be an interesting flyer to take. Again, GM might just give the brand to Chery if it will assume the task of supplying dealers with product to head off lawsuits against GM by dealers. Then, combine product development and distribution of Saab and Pontiac businesses in China and Europe, and send China-made Pontias that are Federalized over to the U.S. to dealers who still want to carry the brand.

Chery could probably strike some sort of alliance deal with GM through which GM stays in the manufacturing end of Pontiac as a U.S. alliance partner. But I’m guessing GM might want to be done with it as much as possible and show Wall Street is finally taking out the trash.

GM, because Buick is so strangely popular in China has been loathe to part with the brand. But it would gladly give up Pontiac and Saab.

If the Swedes give you pushback Chery, tell them that Saab manufacturing is moving to China or Eastern Europe, or the brand will be shuttered. You won’t have paid anything for it, so you have nothing to lose. Closed. Done. Here is a secret. Saab Cars has never…NEVER, NEVER, NEVER…earned a dime. Whatever profits have been squeezed out of Europe have always been more than offset by losses in the U.S. That’s why GM would be glad to get rid of it for free

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Volvo SC90 Concept
2010 Volvo
Volvo cars
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Volvo xc90
Volvo c30
Volvo c30 cars
Volvo Concept
As well as a focus on biofuels and hybrid technology, Volvo is also making energy-efficiency improvements to conventional drive trains. This work has led to the development of two new innovations which will be introduced during 2008 – a low CO2 emitting Volvo C30 and a new diesel Powershift transmission for the Volvo C30, S40 and V50.

The new Volvo C30 Efficiency makes its global debut at the Frankfurt Motorshow on 11th September and is powered by a 105PS 1.6-litre turbodiesel engine. By implementing a series of changes to the aerodynamics and rolling resistance as well as introducing higher gearing and improving powertrain efficiency, Volvo has improved fuel consumption to 62.8mpg and reduced CO2 emissions to below 120g/km from 129/km.

The Volvo C30 Efficiency becomes Volvo’s first model to gain a B-band VED tax rating and will also be exempt from the London Congestion Charge, if the proposed changes to the scheme go ahead next year.

Early 2008 will also see the introduction of a new 2-litre turbodiesel (2.0D) automatic transmission with Powershift technology for the Volvo C30, S40 and V50 model ranges. The Powershift gearbox consists of two clutches that work in parallel and, since there is no disruption in torque delivery during the gearchanging process, gearshifts are instantaneous and the fuel efficiency rating is higher, delivering improved fuel consumption compared to a standard automatic gearbox.

“We are firmly committed to lowering the fuel consumption of our conventional petrol and diesel engines. By doing this we will continuously reduce the overall CO2 emission level for our whole model range,” says Magnus Jonsson, Senior Vice President Research and Development at Volvo Cars.


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