Road Reality » Geely

Sales Figures: August, 2010

John Suit — Fri, 03 Sep 2010 14:00:57 +0000

The numbers are (mostly) in, and the news isn’t good. August sales were down over 5% from July’s, and none of the major automakers were even close to the amount of vehicles they moved in July. Toyota took the biggest hit percentage-wise, followed by Ford and GM. Honda was only down about 4,000 vehicles overall, and almost everyone else stayed flat. The only companies to have better sales month-to-month were Chrysler and Mercedes-Benz.Less than 1 million vehicles were sold in August, which I can attribute to a lot of people taking vacations and getting ready to send their kids back to school. Also, September and October are traditionally when a lot of the new model year cars roll out, so I’d expect a sales slump beforehand. With that said, however, plenty of automakers are running Labor Day sales, and pre-model year rollout sales, so perhaps September will pick up the slack before the remaining 2011 model-year cars are released to the public?

It’s all a guessing game, of course, but even in light of August’s dismal outcome, I’m going to revise my current estimation of 10.5 to 11.5-million vehicles to 11.5 to 12 million vehicles sold during 2010. I think a strong push with incentives and redesigned cars is going to drive sales higher as we go into the fall, and even if numbers drop off for the end of the year, my numbers might still be conservative.

A footnote for you; After having spoken to a few local DC-area dealerships, the 2010 Chevrolet Camaro isn’t selling well, but its crosstown rival, the Ford Mustang, is selling like hotcakes, in both V6 and GT trim levels. It’s a shame that sales of Ford’s iconic Mustang muscle car let the automaker’s total sales drop around 13,000 from July to August, even though both Mercury and Lincoln posted higher numbers than the previous month.

The sale of Volvo from Ford to Geely was completed in July, so August is the first month that Ford can’t claim their sales, which can partially explain the drop for Ford.

Note: As of 9/2/2010, Volvo hasn’t released their sales figures for August. Charts will be updated whenever they do give us the data.

by John Suit

Ford’s sale of Volvo: Complete. Geely’s cost: $1.8 Billion

John Suit — Mon, 02 Aug 2010 14:03:30 +0000

Well, it’s finally happened – Ford completed the sale of Volvo to Geely, the Chinese automaker. Geely forked over 1.8 billion, according to a press release by Ford. Most of it was in cash, but there was also a $200 million “note” involved.

Under the agreements of the sale, Ford will be sharing with Geely tooling, intellectual property, stampings and other car-related materials, as well as engineering support, for differing amounts of time. This gives Geely’s employees a transitional period of help, and I’m sure it also works out to Ford’s advantage, letting them keep an eye on Geely while they have access to Ford’s inner sanctum.

The sale of Volvo lets Ford focus on their core brands of Ford and Lincoln, not to mention their professional relationship with Mazda. The downside of this is that Ford has been using Volvo’s hardware for years to boost its own products. Volvo-sourced drivetrains and platforms are currently underpinning the Lincoln MKS, MKX and MKT, as well as the Ford Taurus, Edge and Flex.

Of course, this is forgetting Ford’s current quality and technology push, both of which have garnered the automaker high praise in the last 12-18 months. I’d look for Ford to develop some new platforms to go underneath new sheetmetal when its vehicles are refreshed over the next several years, pulling away from the Volvo stuff and going with new and better setups.

Meanwhile, good luck to Volvo and its new owners, as the niche automaker has only sold 28,206 vehicles from January to June this year. I project Volvo’s sales to be around 56,400 for 2010, if their current monthly sales continue as-is.

by John Suit

Source: Ford

Breaking News: Ford, Geely come to terms with Volvo's Intellectual Property

roadreality — Fri, 27 Nov 2009 16:48:23 +0000

As part of Ford’s renaissance, they have been cutting costs and pumping money into research and development (R&D). It started in 2007, when current CEO Alan Mulally was hired. He immediately leveraged part of Ford in order to get $4 billion in operating costs, which he then sunk into R&D to bring Ford’s car offerings up to par with their foreign rivals.

The fruits of those labors are coming to fruition, with Ford’s Fusion taking Motor Trend’s Car of the Year award for 2010, and many other Ford cars being received well by American consumers. Another thing Mulally did was to begin selling off underperforming brands that Ford owned. First, Aston Martin was sold to a British conglomerate, and then Land Rover and Jaguar were sold to Tata Motors, an Indian company. Ford then sold its controlling interest in Mazda, and Volvo went up for sale.

Geely, a Chinese automaker, stepped up with a bid to buy Volvo. The problem that has been plaguing the deal is intellectual property: Ford currently shares a lot of the hardware between its Volvo and Ford vehicles. If Ford sells Volvo, the new owner would automatically have the underpinnings to a lot of Ford vehicles. Negotiations have been going on between Ford and Geely for some time now, and this morning it was announced that they had come to an agreement for the intellectual property.

The agreement states that Geely will get any technology that is exclusive to Volvo, but anything shared with Ford will not transfer. This protects Ford, while still giving Geely the base they need to continue production of Volvo vehicles.

What does this mean to us, as American consumers? It gives Geely a way into the US auto market. For some time now, Chinese automakers have been looking to sell their cars here, but have been unable to meet environmental and safety regulations. I believe that our marketplace is already saturated and we really don’t need any more sellers. Car sales in 2007 were over 13 million vehicles, but since then, sales have been declining. Even with the Cash For Clunkers program, sales in 2009 are still not above 10 million. I just don’t think that the market can sustain any more automakers than what are already here. Also, the sale of Volvo is not good for Ford. Even though Volvo sold 73,078 vehicles in the US in 2008, a fairly low number, the safety features and platforms that Volvo has been developing have made their way into Ford’s vehicles, the latter underpinning the Lincoln MKS and 2010 Ford Taurus. While the Lincoln is a niche seller, the Taurus has been well-received so far, and should sell well. I have a feeling that Ford will want whatever Volvo develops to succeed the Taurus’ platform, and selling them off will only make things more difficult. As always, time will tell, but I hope that Ford isn’t making a mistake by selling Volvo.

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by John Suit

Source: Automotive News