🤑 It doesn’t get more affordable. Grab this 60% OFF Black Friday offer before it disappears…CLAIM SALE

UPDATE 1-China's Beijing Auto interested in Volvo -WSJ

Published 06/11/2009, 05:02 AM
Updated 06/11/2009, 05:08 AM

* BAIC latest Chinese firm named a potential buyer

* Analysts sceptical of bid for entire unit

* China automakers interested in technology, designs (Adds analyst comment, Volvo comment and background)

By Fang Yan and Victoria Klesty

SHANGHAI/STOCKHOLM, June 11 (Reuters) - Beijing Automotive Industry Holding Corp (BAIC) is interested in buying Ford Motor Co's Volvo car unit, the Wall Street Journal reported, adding a new name to a list of potential Chinese bidders for the Swedish luxury car brand.

A team of BAIC executives is likely to visit Volvo's Gothenburg, Sweden headquarters as early as Thursday to meet with its executives and tour its research-and-development and manufacturing facilities, the paper said, citing three people familiar with the situation.

A spokesman for state-run BAIC, China's fifth-largest automaker, said he was not briefed on the company's interet in any foreign auto brands. BAIC expressed an initial interest in General Motors' European brand, Opel, earlier this month but did not follow through.

Other potential Chinese buyers for Volvo that have cropped up in news reports include Geely Automobile Holdings, Ford's China partner Chongqing Changan Automobile Co, and Chery Automobile.

Stefan Elfstrom, spokesman for Volvo Cars, declined to comment.

"Ford has said it is a process ongoing, but they haven't disclosed any names," Elfstrom said.

Ford Europe could not be reached immediately.

The worst industry downturn in decades has hammered major global automakers in the past year, forcing Ford's U.S. rivals, GM and Chrysler, into bankruptcy and leading to sales of a number of auto brands and assets.

ONCE BURNT

But analysts said Chinese firms, burned by past acquisitions that backfired, lack skill and stomach to take over the entire operations of their foreign counterparts, and are more likely bargain hunters for technologies and assets being sold in secondary sales.

"Don't take the reports seriously. Lots of so called Chinese interest are leaked by investment bankers and lawyers trying to drum up deals," said Zhang Xin, an analyst with Guotai Junan Securities.

An industry source told Reuters BAIC was interested in technology and designs which could then be used in its first self-developed car which it hopes to roll out in 2010.

BAIC currently only mades Mercedes-Benz and Accent cars at joint ventures with Daimler AG and South Korea's Hyundai Motor.

"BAIC doesn't even have a in-house design car brand so far. How can anyone realistically expect it to take over and turn around Opel or Volvo?" asked the source, who was not authorised to speak publicly on the matter.

One of the people told Wall Street Journal that BAIC's interest was "preliminary" and "nascent."

Geely Automobile, which has also been talked about as a potential bidder for Volvo and GM's Swedish unit Saab, said last month that it has no intention of making a takeover offer for either Volvo or Saab.

Earlier this month, little known Chinese machinery maker Tengzhong Heavy Industrial Machinery agreed a tentative deal with GM on its Hummer unit, but faces challenges completing the purchase.

Chinese state media has run lengthy commentaries predicting the deal could be vetoed by the Chinese government as it runs against Beijing's policies to promote small and clean cars. (Additional reporting by Ajay Kamalakaran in Bangalore; Editing by Lincoln Feast)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.