It's a Small World After All- A Car Guy's Advice to China

Travis's picture

Ford announced today that it's going to further develop it's talks with China’s Geely Group in "more focused" negotiations to take-over the languishing Swedish automaker Volvo, a branch of Ford since they bought the brand from Volvo AB some ten years ago- for a staggering $6.45 billion in 1999 money.

Why do I say staggering?  Well, lets just say, I believe the asking price for Volvo today is much (much) less- and money, well, just isn’t worth as much as it was a decade ago.  I think, though Ford is in the best shape of all the domestics, China just may have Ford by it's "Volvos" on this one.

Some say Ford has benefitted from the Volvo relationship- having produced better, safer cars as the result.  I don’t know, have they?  

A point to note- that new 2010 Taurus (probably the future darling of the rental car business, like every Taurus before it) is based-on a Volvo platform- but whatever, some Pontiacs were based-off Holden platforms- that didn’t make them any better or worse- and people don’t care- it’s just a technicality at best.

Chrysler and Daimler-Benz shared platforms ten-ways till Tuesday, and you see how well that deal paid-off…  Chryslers still sucked, though underneath was a Mercedes-Benz which, despite opinions, is till regarded as one of the world’s most valuable brands- even if they’re “not what they used to be.”   

Many analysts say Fords are “safer because of Volvo” sure, but compared to what?  Everything, with regulations being what they are, is pretty “safe” these days, but what has Volvo gained?  A shitty at best all-wheel-drive system/SUV platform?  Go on YouTube, and watch what a Subaru wagon can do to anything all-wheel-drive Ford/Volvo has to offer. 

It’s embarrassing. 

Volvos are bland, though marketed as "safer" than most- their following here (mostly) is based-on tradition more than anything.  You know the drill- “my parents drove one…  now I will too… they’re a safer car, right?…”

But those who know cars know- it's just marketing.  (That Volvo won’t save your ass any better or worse than most anything else on the road these days, pound-for-pound; sorry, but it won’t.) 

The Volvo platforms are some of the longest-toothed in the business and personally, I wouldn't buy a Volvo, not matter who owns the company- but that’s just me.  It’s not a cutting-edged car anymore. 

Volvo, like Saab, regardless of parent or current nationality- has lost its uniqueness and what I like to refer as their “national pride” and “past edge” in actually making something different.  Thanks to GM and Ford?  Sure.   

Volvos and Saabs were great cars when they were Swedish, independent and concerned with building a solid car; not a marketing arm of Ford or GM- which may make the best cars they have in decades today, but really- to them, Volvo and Saab is just a brand with a loyal customer following. 

To the Chinese- brands like Hummer, Saab and Volvo are everything- their official bid into becoming a real-world automobile maker and player in what is a shrinking market with fewer, albeit much larger international counterparts.

Last year, Ford sold Jaguar and Land Rover brands to India's Tata Motors for about $1.7 billion; again, the only thing Ford did for these brands was take-away the electrical problems- for what was once among England's finest brands. 

Tata, from what I’ve read, is doing well with the deal- making and selling Jaguars and Range Rovers despite their “Prince of Darkness” pasts. 

Surveys have concluded- they’re doing okay, they’re putting out new models, they’ve kept it mostly British, which was better than what BMW could do with Land Rover a decade ago- remember that Anglo-Swabian marriage from hell? 

America didn’t really benefit owning the said brands.  Will the Chinese? 

Absolutely. 

But I think everyone will agree, the Chinese are getting-in on the “cheap,” as America suffers both domestically and in its automobile expansions/acquisitions of the past gone “bad.”

Maybe not “bad,” just not as profitable or beneficial as both would have hoped, neither sides really brought anything to the tables besides experience. 

And experience is exactly what China needs in the global car business, good, bad or indifferent.

But the Chinese better be careful with whatever they buy, because you know, more experienced, global automobile makers have languished with these wares in the past.

My petty advice to the Chinese?  Start racing.  Racing, believe it, or not- sells.  What competes and wins on Sunday, sells in the hearts of customers and wins the national pride of a given producing nation.

Even if the parent-owner nation is half the world away and knows little about making, designing and marketing cars on a global scale at all.

China, you better win, because nobody wants to buy a loser.  And it’s a small world after all…  It'll be even smaller if even you, China, can't make a "go" of these brands.