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Rumor of the Week – BMW Considering Volvo Take-Over From Ford!

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There have been rumors circulating recently about BMW buying Volvo Cars from Ford. Ford Motor Company stated on May 29, 2007 it is not in discussions with BMW or any other company regarding the sale of Volvo Cars.

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But sometimes where there is smoke, there is fire. This rumor has been circulating for a few weeks now. The rumor goes like this… BMW has been conducting due diligence about the possibility of acquiring another brand. Volvo Cars and Alfa Romeo have both been included in the rumor, but Volvo appears to be the strongest candidate.
Why Would BMW Need a Second Car Company?
From 1994 through 2000 BMW owned Rover – including Rover, MG, Rolls Royce, Bentley, Mini, Land Rover and the defunct names Austin, Morris, Riley, Triumph, Wolesley. Whoa, what a lineup!? BMW practically owned the British motor industry with the exception of Jaguar. Termed “The English Patient”, Rover and BMW never gelled. In 2000, BMW sold Rover Cars (MG Rover) to Phoenix Holding Group for £10. They sold Land Rover to Ford for a hefty chunk of change. They got snookered out of the Bentley name and somehow Volkswagen ended up with it. They kept Mini and have made it a great success. They kept Rolls Royce and are presently building modest numbers in Goodwood in sourthern England.
But, BMW needs additional volumes to help its economies of scale. A second company would help BMW in negotiations with components suppliers. Volvo has the heft to help handsomely.
BMW Fiercely Proud of its Independence
BMW is advertising the advantages of its independence. They look down their nose at Lexus – part of Toyota, Infiniti – part of Nissan, Acura – part of Honda, Audi – part of Volkswagen, Mercedes – part of DaimlerChrysler. So, the idea of BMW acquiring some other premium brand has to be considered from the position of strength.
European media reports have speculated that BMW wants to expand its product portfolio, and would like to add a premium brand with front-wheel-drive models to help spread out development costs for its Mini range. (BMW has been spreading some costs already co-developing the new Mini engine with Peugeot).
Volvo could be a good candidate to fill that objective. One of the reasons Ford acquired Volvo was because of its excellent front-wheel-drive large car platform that underpins the S80, XC90, S60, V70, XC70. Ford uses this platform for its Taurus (Five Hundred), Sable (Montego) and Taurus X (Freestyle) vehicle lines. The lower Volvo models have platforms shared between Ford, Mazda and Volvo. How a BMW acquisition of Volvo could untie these relationships must be a central part of any acquisition strategy. (Remember, BMW V8s powered the Range Rover until the 2006 model year – a hang over from BMW’s ownership).

Volvo Part of Ford’s Premier Automotive Group

Ford acquired Volvo in 1999 for $6.5 billion and made it a cornerstone of its Premier Automotive Group which also includes Jaguar and Land Rover (purchased for $2.7 billion in 2000). Ford has sold the fourth PAG brand – Aston Martin – to investors for slightly less than $1 billion. PAG lost $327 million in 2006.
Reports say that Merrill Lynch estimates Ford could raise over $9 billion by selling the remaining PAG brands.
Nobody’s admitting anything yet, but lets see if the denials hold up over time.


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Volvo XC90 – A Year Under the Belt

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Such a Deal! Last July, I leased a Volvo XC90 Volvo Ocean Race Edition (Number 71 of 800). Reacting to a radio ad saying come on down to your local Volvo dealer you can get a Volvo XC90 V8 for $389 a month for 24 months with $3,000 cap cost reduction. How could you pass up a $54,000 SUV for that monthly payment?
Remember, I make my leasing decisions on horsepower per lease dollar so the AWD XC90 with 311-horsepower pencilled out pretty well. In fact, the dealer dropped the monthly payment to $370 without me even asking. But that’s another story.

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Frankly, price was the thing that brought me to the XC90. It had not been high on my list of SUVs to consider, but it has turned out to be great vehicle – not without flaws however.
What makes the XC90 great? Its size is just about optimum. Not too big. Not too small. Compared to the four Ford Expeditions in row I had driven previously, the Volvo is the right size. From the driver’s seat forward and side visibility is excellent. The seats are very comfortable and the color combo was outstanding.
This XC90 is the Volvo Ocean Race Edition in a bright blue with a light tan interior. Very distinctive – not a vehicle you’d lose in a parking lot.
So, what are the nitpicks?
Tire Relationship to Wheel Lips. Have you ever looked closely at an XC90 from the side. It looks like a stork sitting on spindly little wheels and tires with a huge gap between the top of the tire and the wheel lip. Why? Well, Volvo design specs require snow chain clearance. Understandable in Sweden, but I’m willing to forgo that spec for Southern California.


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2008 Volvo XC70: New York Auto Show

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Volvo’s First Crossover Revived
Though the Volvo XC70 and V70 had worldwide introductions at the Geneva auto show, the 2007 New York auto show provided a venue for Volvo’s North American reveal of the XC70. As the XC70’s largest market is North America, it is no surprise the beefier model has been introduced here ahead of its tamer V70 wagon sibling. The XC70 will continue to offer only one powertrain in the States, but with the 2008 model year it gets the new 235HP 3.2L inline six mated to a six-speed automatic transmission.

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On sale in October 2007, this will be the third generation of XC70. It builds on the blend of wagon and SUV that made the first two generations the niche successes they were and substantially adds to the electronic aids intended to make being on the road safer. The XC70 stays only AWD, with basics like Volvo’s Instant Traction System and Dynamic Stability and Traction Control still standard. It is the launch product for Volvo’s version of Hill Descent Control and available with the three-setting (comfort, sport, and advanced) Four C active chassis control system.
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Other electronic aids include adaptive cruise control, Blind Spot Information System, a system that delays incoming phone calls or messages if it decides a given driving situation is too complex (IDIS assesses the complexity of a given driving situation through steering, throttle, brake application), the Personal Car Communicator introduced on the S80, and advanced braking functions including hydraulic brake assist, ready alert brakes, and a system for avoiding brake fade. Collision Warning with Brake Support system will warn the driver if they are getting too close, and brakes are prepared for action to help the driver stop as fast as possible when they notice the danger ahead. This particular system has three settings available, to adjust sensitivity for a particular driver’s tendencies and usual driving conditions.
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The XC70’s passive-safety arsenal, between the standard and optional equipment lists, keeps the optional HID cornering headlights, updates child safety (including adjustable booster seats for the second row), and makes the second-generation WHIPS whiplash system and extended side curtain airbag standard.


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VehicleVoice#61 – A Tour of the Latest in Concept Vehicles with Jim Hall

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There are few things more fun than walking through a major auto show along side AutoPacific Analyst and former General Motors brainiac, Jim Hall. You have to be patient. He knows everybody and everybody knows him, so the going is often slow. But the one liners you get to overhear as he comes upon the latest in concept cars are worth the wait. So we decided to follow him around the North American International Auto Show in Detroit, but this time,we brought the video camera.
Jim checked out the new Cadillac CTS, due to hit showroom floors this October. If you haven’t seen this performance sedan yet, you’re going to be blown away whether you’re a Cadillac fan or not. Cadillac must have had BMW’s 5 series and the Audi A6 in the crosshairs when they dreamed up this beauty. Even Jim was impressed.
He also reviewed a crop of new concepts –
Lexus IS-F
Lexus LF-A
Volvo XC60
Mercedes S-Class Convertible Ocean Drive
Chevrolet Volt
Jim went to design school, so watching him chat about stamped steel is actually interesting. And you can’t beat descriptions like “swoop du jour” and “Ingmar Bergman on acid.”
Thanks for the stroll, Jim. It was fun.

Show Runtime – 14:44


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2007 Detroit Auto Show – 2009 Volvo XC60 – Pre-Shrunk XC90's Coming… Eventually

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As the pendulum swings towards smaller vehicles and ‘socially conscious’ consumers Volvo has decided to shrink some of their XC90s. Volvo will expand their Crossover SUV lineup to compete in the arena with vehicles like the Lexus RX350, BMW X3, Toyota RAV4, Honda CRV and Mercury Mariner (Ford Escape/Mazda Tribute). Some may ask… Does Volvo need another soft roader 5-passenger SUV positioned under its 7-passenger XC90? Is Volvo concluding like many manufacturers that multiple SUVs are required to compete in today’s auto market?
XC60 Violates Volvo’s Naming Strategy
Codenamed Y278, then dubbed XC50, the production version will be called the XC60. This name violates Volvo’s own naming strategy. That strategy, that they have been implementing over the past few years, has each hatchback, wagon or SUV having an odd-number – C30, V50, V70, XC70, XC90. The sedans are all “S” names with even numbers – S40, S60, S80. So, here comes the XC60 and throws all this hard work out the window. Wonder why?


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LA Auto Show – 2008 Volvo C30

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A New Volvo In Search of a New Demographic
Volvo has sculpted a 3-door, 4-seat hatchback aimed at interrupting GenY’s traditional perceptions of a Volvo. Will it capture the hearts, minds, and pocketbooks of a demographic beyond Volvo’s traditional customers? …only time will tell.

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Forecast
Engineers and designers at Volvo have taken Ford’s C1 platform (used for the European Ford Focus in early 2004 and currently used by the Mazda3, Mazda5, Volvo C70 Coupe/Convertible) and built a hip hatchback with some urban flair. Already being sold in the U.K., the C30 is also destined for the U.S. market with a date set for summer 2007. Even though 75% of the 65,000 Volvo C30’s produced annually are destined for Europe, thousands will be shipped to the United States. Whether it was the success of the MINI Cooper or Volvo’s wish to tap into a younger demographic, they have decided to focus on a new segment. According to Fredrik Arp – President and CEO of Volvo Car Corporation, the new C30 “is a car that aims for a group of young singles, or couples, with intense urban lifestyles”.


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IIHS Top Safety Picks for 2007 Model Year

IIHS released the results of its 2007 Safety Pick Awards on November 20. VehicleVoice and AutoPacific feel that these results are important to communicate to our readers. Along with other awards for quality, satisfaction and performance, safety awards can and should be among the information sources a buyer uses when deciding which new vehicle to buy. After all, the Internet gives us almost perfect information.
While we do appreciate the safety value of electronic stability control, it will take years for the entire fleet to be equipped with ESC. For IIHS to eliminate all vehicles lacking ESC eliminates many otherwise safe vehicles from their analysis. This is too simplistic an approach.
2007 TOP SAFETY PICK award winners: award criteria are tougher; SUVs eligible for first time
The Insurance Institute for Highway Safety announces 13 vehicles that earn TOP SAFETY PICK awards for 2007. Winners include 4 cars, 7 SUVs, and 2 minivans. This award recognizes vehicles that do the best job of protecting people in front, side, and rear crashes based on ratings in Institute tests. Winners also have to be equipped with electronic stability control (ESC).
WINNERS
Large car
Audi A6 manufactured in Dec. 2006 and later
Midsize cars
Audi A4
Saab 9-3
Subaru Legacy equipped with optional electronic stability control
Minivans
Hyundai Entourage
Kia Sedona
Luxury SUVs
Mercedes M class
Volvo XC90
Midsize SUVs
Acura RDX
Honda Pilot
Subaru B9 Tribeca
Small SUVs
Honda CR-V
Subaru Forester equipped with optional electronic stability control


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Blowing Off the Lot – the Hot Sellers

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Since we have identified the vehicles that have the longest days supply, we have been asked to show which vehicles have the shortest days supply. Which vehicles are so hot they just blow off the dealer’s lot? As with the slower moving vehicles where we arbitrarily cut off the days supply at 150 days, here we are using 50 days as the cut off point. The details are shown “below the fold”


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Let's Talk Cars: Automotive Futures Center and the Volvo S80 Test Drive

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Welcome to Let’s Talk Cars

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This week VehicleVoice introduces you to AutoPacific’s Automotive Futures Center in Southern California. The analysts and experts of AutoPacific do in-person research at the this facility that is one-of-a-kind kind in the world. AutoPacific clients from the USA, Europe, Japan, Korea and China use thte Automotive Futures Center to identify what American consumers really want in their next cars and trucks.
Also on tap, we begin a new occasional series called Test Drive, where we spotlight a specific vehicle and a specific destination. This week it’s the Volvo S80 and the Colorado Rockies, where there’s still plenty of snow to add a twist to our test drive. David Barrett is behind the wheel and takes you for a spin from Denver to Rocky Mountain National Park. This is a last look at the venerable S80 in this guise. The S80 is due for a major freshening later in 2006.
Show Rundown
00:32 AutoPacific’s Autotive Futures Center: George Peterson, President and Founder and Jim Hossack, Vice President and Senior Consultant
03:35 Volvo S80 Test Drive: David Barrett, VehicleVoice Contributor


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Volvo XC90 Gets Updated Look for 2007

New York Show is Backdrop for Reveal
Volvo‘s current XC90 was introduced for the 2003 model year, and is due for a bit of a refresh. As the U.S. accounts for about 50 percent of all XC90s sold, it is no surprise that the minor change for 2007 model year was introduced at the 2006 New York auto show. Brought to you by AutoPacific and VehicleVoice, below is a first review of the changes, complete with before and after photos.

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Among the most significant aspects of the update, which include some new safety features as well, is an all-new 232HP 3.2L in-line six-cylinder engine to slot between the 208HP 2.5L turbocharged I5 and the 315HP V8. The new six launches in the S80, though quickly followed by installation in the XC90, and is mated to a six-speed automatic transmission. The new engine will figure prominently in Volvo’s range over the next several years.
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