Will Renault Buy Volvo By 12/31/08?

Ford taps Renault for Volvo sale

New York, July 1 (Reuters): Ford Motor Co has had exploratory talks with French car maker Renault SA to sell Volvo, but the talks ended quickly because of price differences, sources said.

The two parties have spoken again after their initial discussions, which were held less than a year ago, the sources said.

Even though Ford has said it has no plans to sell Volvo, the company has been holding informal talks with interested parties, the sources said.

Analysts have said Ford, which lost more than $15 billion in the past two years and has abandoned a long standing goal of returning to profitability in 2009, could do with the extra cash.

Ford did not reveal the results for Volvo, a Swedish brand it bought for $6.45 billion in 1999. But it has said the unit had lost money in 2007 and it wrote down the value of Volvo by $2.4 billion following a review of the brand’s prospects in January.


Billionaire investor Kirk Kerkorian, who earlier this month increased his stake in Ford to 6.5 per cent and said he could step in to propose business strategies for Ford, could also be a bridge to more serious talks with Renault.

Kerkorian, a long-time investor in the auto industry, had built up a stake in General Motors three years ago and suggested an alliance with Renault-Nissan, which the latter rejected.