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VOLVO CARS

Crown rolls out new bid for Volvo Cars

The international consortium Crown, which includes former Volvo head Roger Holtback, has submitted a revised offer to buy Volvo Cars.

“An offer from the Crown consortium has been submitted. I can confirm that,” Holtback told the TT news agency.

However, he refused to elaborate on the potential deal to buy Volvo from US-owner Ford reported on by the Wall Street Journal.

Magnus Sundemo, chair of the Volvo Cars’ chapter of the engineers’ union Ingenjörer/Akademikerna, thinks that Ford has a rather flexible deadline for how long it may take before reaching a final decision about an eventual sale of Volvo.

“It’s a malleable limit. But naturally it’s creeping closer all the time. And the end of the year is the end of the year. There may be a goal they wish to achieve before the year is over,” he told TT.

Sundemo believes a potential deal with Geely is being held up by Ford’s desire to protect large portions of its intellectual property from leaking to China.

“From what I understand, that’s the issue Ford is putting most of its energy into. It’s a bit of a double-edged sword. We (Volvo’s unions) want to bring enough with us to the new owners to remain a competitive company. Meanwhile Ford wants to release as little as possible,” he said.

What remains clear, however, is that the ties between Volvo and Ford won’t be cut especially quickly.

“Somehow there will be a ‘transfer period’. We have common platforms and common tools. That must be regulated. You can’t just cut the cord. We’re going to have to live together for a few years regardless of who the buyer is,” said Sundemo.

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CARS

Volvo stays in fast lane despite China dip

Swedish automaker Volvo Cars, owned by China's Geely, reported Wednesday a rise in first half profits even as sales tumbled in its biggest market, China.

Volvo stays in fast lane despite China dip
Volvo Cars' Swedish chief executive, Håkan Samuelsson. Photo: Bertil Ericson/TT

Note: An earlier version of this story said that first-half profits fell. While net profit attributable to shareholders indeed fell, overall net profits were up. The story has been amended to reflect this.

Net profit more than tripled to 877 million kronor (92 million euros, $56 million), while turnover climbed by 12 percent to 75.2 billion kronor.

Operating profit surged by more than 70 percent to 1.66 billion kronor, thanks to a strong US currency and robust sales of Volvo's SUV model XC60.

But net income attributable to owners of the parent company dropped by 60 percent to 173 million kronor (18 million euros, $20 million).

Volvo's overall car sales in terms of units rose by 1.4 percent to 232,284 during the first half.

The strongest sales growth was registered in Sweden and western Europe, while they remained stable in the United States and declined in China, by 1.2 percent, and the rest of the world, including Russia.

Volvo went through several dark years before returning to profit in 2013. In 2014, it beat its sales record from 2007, selling almost 466,000 vehicles. CEO Hakan Samuelsson told Swedish news agency TT the company expects to sell 500,000 cars this year.

The number of Volvo employees has risen by 10 percent in the past year, to 28,000 worldwide.

Despite its economic slowdown, Volvo plans to boost its presence in China and has acquired 50 percent of three joint ventures from parent company Geely: two assembly plants and one research and development centre.

Geely paid $1.8 billion to buy Volvo from US carmaker Ford in 2010.