Page last updated at 20:49 GMT, Wednesday, 25 March 2009

Ford confirms talks on Volvo sale

Volvo V70
Volvo was given state aid in December

Ford has confirmed it is in talks with "a number of parties" regarding the sale of its Swedish subsidiary Volvo.

The US giant said it was pleased with both the number and "quality" of those who had expressed an interest, but did not reveal any names.

Ford is seeking to offload loss-making Volvo Cars as it continues efforts to turnaround its own fortunes.

In 2008 Ford made its biggest ever annual loss, despite selling Jaguar and Land Rover for $2.3bn (£1.15bn).

Those two UK-based brands were bought by India's Tata Motors.

According to reports in Sweden, a number of Chinese firms are interested in buying Volvo.

These are said to include Chery Automobile, Dongfeng Motor Group and Chongqing Changan Automobile.

"Ford is now talking in more detail to these interested parties about the future for Volvo," said a spokesman.

Industry-wide woes

Volvo made a loss of $736m in the last three months of 2008, while Ford's overall loss for the whole year totalled $14.6bn.

Ford Taurus
Ford is preoccupied with turning around its US fortunes

Like most of the world's carmakers, Ford and its Volvo unit have seen sales and profits fall as the global economy has declined since last summer.

Ford has been especially affected in its US home market, where like American rivals Chrysler and General Motors (GM), it has also failed to keep up with the growing demand for small, more fuel efficient cars.

However, while Chrysler and GM have to date received a combined $17.4bn in state aid from the US government, and recently asked for a further $21.6bn, Ford has so far said it does not need the money.

Volvo and fellow Swede carmaker Saab were given 28bn kronor (£2.3bn, $3.5bn) from the Swedish government in December.

Saab is owned by GM, which already recent said it was in talks to sell the business.

Separately on Wednesday, Fiat chief executive Sergio Marchionnie said he was now more optimistic about the global car industry, saying he expected to see the US economy recover in the second half of this year.

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