The Auto Writer

The Swedish government is playing matchmaker with itself, apparently favoring Volvo over Saab when it comes to providing financial assistance. With just 9.2 million residents, the Scandinavian country has the distinction of being the home to two well known automotive brands, Volvo and Saab. Though home grown, both automakers are now owned by a pair of big American corporations, Ford and General Motors respectively.

Volvo and Saab are ailing because their parent companies are in a world of hurt. But, Ford has a couple advantages over General Motors when it comes to seeking and receiving assistance from the Swedes: Ford hasn’t sought financial relief from the U.S. government (yet) and they’ve done a better job in managing Volvo than GM has in managing Saab.

A case in point: Ford has always held Volvo fairly separate from the parent company, allowing Volvo to continue to develop products and collaborating with Ford on other projects, namely safety initiatives.  Ford management has pretty much respected Volvo managment while GM came to Sweden with a divide and conquer mentality.

When it comes to Swedes, they’re the expects at dividing and conquering…just ask your local Viking.

Money For Volvo

After months of asking, the Swedish government has announced that Volvo would be the recipient of government loan money according to Motor Authority.  Volvo will receive US$572 million in loan guarantees because Ford has given their word that they will see Volvo through to its sale while General Motors hasn’t offered similar assurance.

Automotive News (subscription required) has reported that there are three suitors for Volvo with bids expected to arrive in the first half of April. Two Chinese automakers have shown interest in the company while the Automotive News says that a “European constellation” could be the third party interested.

BMW, Mercedes Make A Joint Bid?

My guess is that the so-called constellation would be some sort of joint bid by BMW and Mercedes or perhaps include Volkswagen. BMW and Mercedes have been working together on several projects of late and may eventually merge operations in a bid to survive long term.

Volvo even in its current state would be an attractive addition to any healthy automaker’s portfolio. Across the brand, all models are successful and competitive. Not so with Saab.

As for Saab, the odds on its survival are fairly grim as no one is expressing interest in the troubled automaker. With Volvo selling three to four times the number of vehicles as Saab, it looks like Sweden will soon be the home of one car maker.