28 January 1999
Volvo, the Swedish car and truck maker, announced it was selling its car unit to Ford Motor Co for 50 billion crowns ($6.5 billion), allowing it to focus on trucks and commercial vehicles.
The bid by Ford won over other European automakers, including Fiat SpA and Volkswagen AG, who were interested in a deal with Volvo. Rumors were that General Motors was also talking to Volvo.
Volvo is one of the smallest automakers in the world. Its worldwide production amounts to about 400,000 cars. Volvo's largest single market is the United States, where it sold last year 100,200 vehicles. Sweden is the next largest with 53,600 cars. Volvo holds 1.6% of the European market share.
Ford sells about 7 million cars per year worldwide. It's European market share is 10.1%.
The Ford-Volvo acquisition is another move in the recent chain of purchases and mergers in the automotive industry as smaller players look for larger partners to combat overcapacity and rising costs.