Rumor: BMW to buy Volvo?

Rumors | October 27th, 2008 by 30

The latest rumor going around and reported by the folks at Teknikensvarld.se, is that BMW is in talks with Ford to buy the Volvo brand. …

The latest rumor going around and reported by the folks at Teknikensvarld.se, is that BMW is in talks with Ford to buy the Volvo brand. There is no secret that Ford is “hurting” at this point and the Volvo sale could be an emergency solution and a large infusion of cash.

According to Teknikensvarld, senior sources, which have transparency in both the BMW and Ford, told the UK Sunday Times that the two companies have begun negotiations for a sale of Volvo, but both companies have refused to comment the speculations.

The Volvo-BMW rumor started last year, in the same time with another speculation stating that BMW is looking into the Aston Martin brand as well. Which one of the two will be? Time will tell.

So, what do you think of BMW’s plan to buy Volvo? Does it make sense? Would it follow the Mini successful acquisition?

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  • Artmic

    Why do they need Volvo?

  • Giom

    What would be the major difference to Rover? (Except the obvious)

  • Lee

    Why not? Volvo has some nifty gadgets in their cars to offer BMW, and maybe BMW can help turn around some of Volvo’s understeering pigs into decent-handling cars.

    They’re different enough car companies with different enough goals and consumer markets to not risk shooting themselves in the foot over it. I say go for it.

  • Fiery

    I’d say it would really save Volvo which is in a struggle for years now. It could put Volvo back in the game (in the game of Audi, BMW, Mercedes) by re-introducing rear-wheel drive, and broading the product range to cover the market. Right now S40 is too small, S60 is too old, S80 & XC60 & XC90 are OK.

    Frankly, I’d really love to see BMW making some nice Audi and Mercedes competitors. BMW would stay as the “sporty” premium brand, while they would also have a “comfort” premium brand (Volvo) as well. It makes a lot of sense IMHO.

  • Fiery

    … not to mention the stupid engines Volvos are struggling with: they even had to borrow some French diesel engines from PSA in S40 and C30. Geez, French engines simply poisoning the blood line of such premium cars… The amazing BMW diesel engines would really help to put Volvo back in the game.

  • john

    You guys will report any crap that you see without any semblance of journalism. This story is completly false and anyone with an IQ above 10 would know that, especially a blogger who actually knew something about BMW.

    I know you will delete this post as that goes along with your complete lack of reporting skills.

    Well I guess this stupid volvo/BMW has to make its rounds once a year. In a few months the rumor about BMW and Ford will resurface as well and i’m sure bmwblog will report on that too.

    Good job fellas

  • http://www.bmwblog.com Horatiu B.

    @john: No, John, we won’t delete this.
    But I would like to respond to you:

    1. The title says: “Rumor”
    2. Here is a thread on a BMW forum, where two people very well connected within BMW talk about this: http://www.germancarzone.com/bmw-lounge/27055-bmw-volvo-again.html

    Despite the attack on us, we would still like to thank you for reading our blog.

  • adood84

    During this time of economic crisis , I don’t think it would make any sense for BMW to buy Volvo

  • Giom

    @john:

    Gees dude! Get a grip! The sun will still come up tomorrow…he he.

  • Joe

    BMW learnt a lot from the Rover disaster. If they do it, it will be done well. Good ideas as I think they totally target different markets.

  • Lee

    @john:
    The automotive industry has, is, and will continue to be full of rumors. Some come to fruition; most don’t.

    To get your panties in a wad over one of them being reported upon, especially when it was designated as a “rumor”, is pretty idiotic. If some BMW blog site posting a “rumor” is the worst thing that happens to you today, it’s a pretty damn good day.

    Now rinse the sand from your vagina and carry about your business.

  • Fuxl

    Some people on this blog have no idea about how the market works. BMW SHOULD buy Volvo becouse it would then enter a different segment. Of corse Volvo would stay FWD and not many things would get changed. Some people just don’t want BMW cars becouse they are RWD, to sporty or they don’t like the image the brand portrays. Such people would buy the Volvo – and the money would still go to BMW. Simple as that:D

  • john

    Well I have to assume everyone here is new to BMWs, because if you’ve owned a BMW or have been a fan for more then 12 months, this is about the 4th or 5th time this rumor has circulated, it comes up about once a year at about the same time every year. Its pretty much an internet joke at this point. Any real BMW fans alive out there??????

    Screw it. Please delete this comment, its just not worth trying to talk to numbskulls.

  • Lee

    @john:
    Just because you’re paranoid it doesn’t mean they’re not really out to get you.

    Has the rumor been circulated a few times? Sure. Does that make it 100% false? Not by default, no.

  • Lance

    BMW should have learned their lesson from Rover. You cannot buy another luxury brand that’s competing with your own segment head on and expect both you product and Volvo to prosper together. One will be better than the other and in this case BMW should always be better. The only reason is to have joint development with the Mini for front wheel drive chassis to reduce costs, but is that worth such a big investment? All they hae to do is to introduce more Mini’s or perhaps another green brand that’s front wheel drive. I would actually want BMW to buy Aston rather than the Volvo brand that’s long dead. And they should not come with the parts sharing non-sense if they buy the Volvo brand as they’ll just be digging their own graves. The current composure of the BMW Group is perfect, that’s the reason they are no.1 at the moment, stay try to the BMW Group and stop making risky decisions of acquiring some dodgy companies.

  • Auday

    @John

    Harsh dude!
    I agree with you to some level that BMWBlog sometimes report things that dont deserve mentioning, but that’s not the common.

    Timesonline.co.uk reported this news today, and I saw it on a couple of places, so it IS a legit rumor. IMHO BMW would be stupid to do this, I’m sure they have enough business brains that told them it’s a good idea, but at least for us it’s a disaster, BMW will have to compromise it’s own cars to bring Volvo back (as they did with Rover and as Mercs did with Chrysler).

    If you ask me (and that’s a totally uneducated opinion) I would say they should buy Lotus which will enhance BMW sporty image with the lack of a super sport car. Imagine a a Lotus-BMW-M brand, this would be a real kick ars. Or maybe they should invest into Sauber and make it a road car manufacturer in addition to F1, with something like BMW-Sauber-M1 car :)

  • Lance

    @Fiery: The point of acquisitions should be to make more money for the parent company, not to build more exciting car brands or save another brand from trouble. If they are going to share stuff, it’d be diluting the BMW Group image. Volvo will be a burden like Rover, you can see that now already. Rather buy Aston, that’s got a brighter future less competition

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  • http://www.mckennacars.com Joshua

    very interesting comments,

    if you want to see some good conversation check out

    http://www.bmwblog.com/2008/10/23/obama-compared-to-a-bmw-while-mccain-gets-the-ford-title/#comment-64630

  • mathis

    As stated its an old rumor, from last year. And what a lot of people actually forget is that at the end of that rumor BMW actually acquired a company, it turned out not to be Volvo but rather a Motorcycle maker, don’t remember the name though.

    Personally I don’t think BMW & Volvo make sense. The cooperation between
    Merc & BMW makes more sense, even though it doesn’t excite me that much either – despite my feelings its less risky and there are more logical synergies.

    I agree that BMW & Volvo, would be a lot like BMW & Rover. Front vs. rear wheel drive and other problems that would mean A LOT of extra development costs. In the current economic environment, BMW’s best move is the cooperation with Mercedes…

  • Fiery

    @Lance: “Volvo will be a burden like Rover, you can see that now already”.

    I don’t see it that way. Surely it wouldn’t make much sense to acquire Volvo and keep their cars as is. BMW doesn’t need a Volvo (“under their wings”) like Volvo cars are now today. But to push Volvo onto another level — or let’s say bring back the good-old Volvo days — by building Volvos on existing BMW platforms would be a different (and IMHO good) way. Just imagine the existing S80 with the same Swedish luxury interior, but a proper size (next 5-series platform), proper layout (rear-wheel drive, optional AWD), a proper gearbox (Steptronic or DKG) and proper engines (BMW *.*)

    But I admit, that idea would also rise a question: what would BMW benefit from spending a couple of billion euros? Probably not much, since engineering-wise I don’t think Volvo has more than 2-3 things that BMW doesn’t have (or is not under development right now already). So probably negotiations will be “artifically delayed” by BMW until Ford is on their knees, knocking Volvo shares to the floor :) So for e.g. half a billion euro then BMW could acquire the remains of Volvo — the brand itself basically…

  • http://www.bmwblog.com Horatiu B.

    From the good comments here, I’m assuming it was interesting to post this rumor. In the link I posted above, some BMW guys give some good insight.

    My take is that it will make sense up to a point, and yes, BMW could expand into another market, one that also has loyal buyers, but in the same time, there will be many risks associated with this acquisition, especially now with all the financial problems.

    I do remember typical discussions before Mini was acquired and what a bad idea it will be, but now….Mini makes them tons of money.

  • mathis

    I agree Horatiu, it was good to post the renewed rumor.

    Mini was a totally different type of deal in my opinion. Mini was a good possibility to re-create something unique – once that was successfull they expanded the range.

    With Volvo the range is already quiet complete small SUV, big SUV, compact, small, mid and full size cars. A coupe-convertible, a crossover. And all on a front wheel drive or halldex basis. A complete re-engineering will cost massive amounts of money.

    Besides the money, I think the main point is that Mini gave BMW a possibility to totally recreate a brand, that’s not possible with Volvo.

    It could be possible in the future with for example Austin Healey, which unfortunately might be done by the chinese now.

  • Auday

    @horatiu B
    Mini is a different market, BMW is saying that we could be successful in the Front wheel drive small cars but we dont want to delute our BMW brand with it so it made sense. Plus mini is a revived brand and now it built it’s own character that doesnt depend much on the old original mini, and of course it’s the top of the line for small sporty kinda-luxurios FWD.
    Volvo on the other hand is very close to BMW market, it’s almost in the same price range as BMW and Audi, and it doesnt have anything that BMW lacks not even the image (well Volvo used to have it, not anymore), so I really dont see the point. If they buy Alfa Romeo (I know it’s impossible that Fiat would sell it, but hypothetically speaking) then I would understand it more, alfa is on the lower end of the price range, has perfect sport image, perfect history, lots of fans, just lacks the technology of a company like BMW to bring it alive.

  • http://www.bmwblog.com Horatiu B.

    @Auday: I agree that the Mini is a different market, but it was a huge bet for BMW as well. Like I said, I know many people that will buy a Volvo before a BMW sedan or wagon, just because of the “safety of a Volvo”. Many people associate Volvo with safety immediately. Could BMW build on that? Absolutely. Will it make sense? I am not sure.

  • Mathis

    Strange ;-) I used to associate ‘safety’ with Volvo too, until I started driving BMW.

  • Tom

    Anyone following the stock market with regards to Porsche-Volkswagen? Porsche may have just made billions the past couple days. While it’s a little O/T, I’d like to see a separate blog post on the recent news.

  • Mathis

    @ Tom

    This will probably be the second year that Porsche makes more money with their VW shares than by selling Porsche cars. More power to Wendelin Wiedeking ;-) without him Porsche would have dissapeared long time ago.

  • http://www.bmwblog.com Horatiu B.

    @Tom: I did, props to them. We might cover those news, somehow compared to BMW. If you have any ideas, please feel free to share them with us.

  • Ryan

    I think it would make a lot of sense for BMW to buy Volvo. BMW don’t need safety systems as they have their own. HOWEVER Volvo have the know how of producing similar systems that are cheaper and are just as successful.

    BMW would also gain a bigger foot hold in European markets with the Volvo network and could entirely re-structure their own ranges with their new niches taking over and getting rid of their estates for Volvo to take over. By giving and securing Volvo’s own identity for producing cars that are long lasting, safe and exciting, BMW could return to racing and develop their compact saloons. Volvo on the other hand could bow out of the luxury market and develop practical solutions such as SUVs and MPVs.

    It would be great for Volvo to return to rear drive platforms too.

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