America's car-market troubles are well-known and much belabored of late, but China's automotive industry isn't facing such a dire situation. In January, China's total car sales overtook America's for the first time, and many of the constituent companies, such as Chery, are looking outside China to for growth opportunities in Europe. Ford's Volvo brand, up for sale to raise cash for the Blue Oval, is one of those opportunities, according to the latest reports.
Ford put Volvo up for sale late last year to help raise cash as the car market crashed. Since then it has found little in the way of interest for the company, in part because many of the brand's potential buyers are facing similar situations to Ford.
But now Chery Automobile has emerged as a front-runner for the brand, according t oa Reuters report. "Chery has been in touch with several European auto brands, including Volvo. The company might be making some big moves in 2009," said a confidential source. The news aligns well with reports from mid-2008 - before Ford even officially put Volvo up for sale - that the Chinese brand was looking to buy the brand.
It's not clear if Ford has received or is entertaining any formal offers for Volvo from Chery, but the interest on Chery's part appears to be strong. The purchase of Volvo could present a huge opportunity for the company to emulate its Japanese and Korean counterparts, expanding into Western markets and growing its presence as a global carmaker. A decision late last year ended an alliance with Chrysler to build and sell a Chery small car in the U.S.
Ford could certainly use the cash. Although it has not partaken of the federal loans rivals General Motors and Chrysler have received, it has sought a $9 billion line of credit from the government in case things should worsen further. At this point, predictions for 2009's overall outlook are not turning upward, so Ford will need all the help it can get to avoid going further into debt.
