New York: Ford Motor Co’s sale of Volvo is moving ahead as it runs due diligence on the remaining bidders, and a buyer could be announced by the end of this month or next, two sources familiar with the matter told Reuters.
Less than five bidders remain in the auction for the Swedish brand, and China’s Geely Automobile Holdings is one of them, the sources said. Both people declined to be identified because the details of the auction are confidential.
Geely is also in the first round of bidders for General Motors Corp’s Saab brand, according to another source familiar with the Saab auction.
One of the two sources familiar with the Volvo auction said the bidders were being given management presentations and tours of the Volvo facilities in Sweden.
Ford, the only US automaker that did not seek emergency loans from the US government, put Volvo up for sale in December as it looked to cut costs and raise cash amid industry-wide record-low vehicle sales.
Ford has already sold Aston Martin, Jaguar and Land Rover, disbanding the Premier Automotive Group, whose only remaining brand is Volvo.
The Dearborn, Michigan-based automaker lost $14.7 billion in 2008 and has reported losses of about $30 billion in the past three years. It also burned through $21 billion of cash last year.
Ford bought Volvo for $6.45 billion in 1999 and wrote down the value of Volvo by $2.4 billion following a review of the brand’s prospects in January 2008.
But with auto sales at record lows — Volvo’s US sales fell nearly 37% in April — any likely buyer is expected to buy the brand at a heavy discount.
Volvo posted a loss of $736 million on a pre-tax basis in the fourth quarter of 2008, and lost $255 million in the first quarter of this year.
Ford only began disclosing Volvo’s results last year, in an effort to make it a more independent unit.