The Auto Writer

Now that Jaguar, Land Rover, and Aston Martin are out of the Ford fold, speculation continues to surface about the possible sale of Volvo, the remaining brand in Ford’s premium fleet arsenal.

Sure, Ford could use the money, particularly if someone wants to pay the $5-6 billion that some people think it would fetch, but I believe a sale would be very shortsighted on Ford’s part. Instead, keeping Volvo makes plenty of sense, particularly as the world automotive brands consolidate. By 2020 or so, the number of major automakers will likely decrease through mergers, acquisitions, and partnerships.

At first look, Volvo may not seem worth holding, but in the long term scheme of things its value is likely to increase.

Volvo can help Ford and vice versa by:

Sharing components with Lincoln, Ford’s domestic premium brand. A year ago I wouldn’t have considered Lincoln to be a luxury make, but I believe the brand is heading in the right direction. The MKS sedan going on sale this summer is a step in the right direction and although I don’t consider the MKZ to be a worthy true-luxury car, it is selling well. Sharing components with all Ford divisions makes sense, but Volvo doing for Lincoln what GM plans to have Opel do for Saturn is the way to go: share select models, particularly platforms.

A stronger Lincoln would benefit Mercury. Mercury is probably the most damaged brand on the planet and some have called for Ford to sell Mercury along with Volvo (who’d want it?) For Ford to simply pull the plug on Mercury would be a difficult proposition, probably costing the company tons of cash comparable to GM’s closure of Oldsmobile. One or two Volvo derived Mercurys along with two re-badged Ford models would help bring attention to Mercury as would a Mazda-derived sport coupe ala the Capri.

Like GM, Ford is strongest outside of the North American market, something many analysts forget when looking at the overall condition of the Blue Oval. Gas prices will always be a factor, therefore maximizing production of current fuel efficient models (Focus and the Fusion/Milan/MKZ) is a short term solution while planning on a stronger alliance between Ford-Volvo-Mazda is cost efficient and ensures Ford’s long term viability.