Automotive News Update
What is this...this announcement today..is in contrast to all that have gone
Answers all of the questions and answers none...
Fewer than five bidders remain in the auction for the Swedish brand, and China's Geely Automobile Holdings is one of them, the sources said.
Both people declined to be identified because the details of the auction are confidential.
Geely said today it has no intention to bid for automakers Volvo or Saab, according to a Hong Kong stock exchange filing.
"The company has not submitted, and has no plans to submit, any bids concerning the takeovers of Volvo or Saab as stated in recent press articles," Geely said in its filing.
Geely issued the filing in response to a 13.6 percent surge in its Hong Kong share price on Thursday.
Geely's Chinese rival Chongqing Changan Auto also said it had no plan to buy Volvo.
One of the two sources familiar with the Volvo auction said the bidders were being given management presentations and tours of the Volvo facilities in Sweden.
Ford Motor launched a strategic review of Volvo including a possible sale in December as it looked to cut costs and raise cash amid industry-wide record-low vehicle sales.
Ford has already sold Aston Martin, Jaguar and Land Rover, disbanding the Premier Automotive Group, whose only remaining brand is Volvo.
Volvo said on Thursday that talks with the Swedish government on state guarantees for loans from the European Investment Bank (EIB) had been put on hold.
Volvo and the Swedish government have jointly decided to postpone the discussions on the state guarantees due to the possible sale of Volvo, the company2 said.
In March, the European Investment Bank (EIB) approved loans of 200 million euros ($266 million) for Volvo, subject to a Swedish state guarantee.
Volvo said the loans had been planned to provide financing to environmental technology projects.
"We are disappointed that we have not been able to come to an agreement," Volvo CEO Stephen Odell said in a statement.
The Swedish debt office, which has handled negotiations with Volvo on the guarantees, said Volvo had declined the conditions in a proposal the office submitted in April after discussions with the government.
"As I interpret this, Volvo will come back to the government when this strategic overview and the picture regarding a potential new owner becomes clearer," said Magnus Thor, head of the national debt office's guarantee and loan department.
Maria Bohlin, a Volvo spokeswoman, said the outcome was a disappointment, but that the government demanded a long-term commitment which made the matter very complex since Ford is in the process of selling the Swedish car brand.
She said the company's projects earmarked for EIB funding were still running and that there were no plans to cut jobs as a result, though the project plans would need to be changed.
"Deadlines will now be revised," Bohlin said. "So of course this affects us. But the projects are still running."
Volvo will now focus on other government sponsored initiatives such as support for research and suppliers.
"In December, the government announced these rescue loans, but very few, or hardly any (suppliers), have been able to get any money. The conditions are very strict," said Bohlin.
Ford bought Volvo for $6.45 billion in 1999 and wrote down the value of Volvo by $2.4 billion following a review of the brand's prospects in January 2008.
Volvo posted a loss of $736 million on a pre-tax basis in the fourth quarter of 2008, and lost $255 million in the first quarter of this year