Volvo Dealers Encouraged by Sweden’s Industry Aid
By Christie Schweinsberg WardsAuto.com, Jan 25, 2009 3:22 PM

NEW ORLEANS – Volvo Car Corp.’s U.S. dealers here at the 2009 National Automobile Dealer Assn. convention are enthused by the financial support the Swedish government is offering the auto maker, believing it will make it easier for parent Ford Motor Co. to find a suitable buyer.

Ford, which has owned Volvo for the last 10 years, is trying to sell the mid-luxury brand to raise cash for its core North American operation.

“One of the things that came up that was very positive was the Swedish government’s commitment to loan money to the product; not to Ford but to Volvo,” Raymond Ciccolo, line chairman for Volvo at NADA, tells Ward’s following the brand’s franchise meeting here today.

The move is “very positive because a potential buyer, knowing they have the support of the Swedish government, that’s going to make a big difference in a person’s interest in Volvo,” he says.

Sweden in December made available SK25 billion ($3.1 billion) in loans to aid its auto industry, which also includes General Motors Corp.’s Saab brand. However, Swedish officials say they have no plans to take a stake in either car company.

Ciccolo, a 50-year Volvo dealer from Boston, says while many questions were fielded at the hour-plus meeting here, the overall tone was “upbeat. “It was the most positive meeting we’ve had in years,” despite the lack of product announcements or advertising talk that’s marked previous Volvo franchise meetings at NADA.

Dealers disappointed no Ford Sync for Volvo.

“It was essentially a general overview, and (Volvo officials) answered questions from the audience primarily,” he says.

While there is concern about potential buyers for Volvo, Ciccolo says he and fellow dealers agree they don’t want to dwell on the situation.

“We need to focus on what we can do to sustain and grow our business and try to disregard the changes that are inevitably going to happen with Ford. It doesn’t help us by dwelling on something that tends to be a negative.”

Nevertheless, Volvo dealers had hoped for more success with the brand under Ford’s ownership.

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“I think our expectations we’re higher,” Ciccolo says. “I think we thought Ford Motor Credit was going to help us a lot more. I think we’ve expressed some disappointment that a lot of Ford technology wasn’t given to Volvo.”

Ciccolo specifically mentions the lack of Ford’s Sync infotainment system in Volvo models. Sync was developed by Microsoft Corp. And while Ford initially had exclusive rights to the technology, it now is being rolled out by other auto makers, starting with Hyundai Motor Co. Ltd.

Volvo officials are calling for 2009 sales to be flat with 2008, when 73,102 units were delivered in the U.S., a drop of 32.1% from 2007, Ward’s data shows.

Ciccolo says Volvo fleet sales will be down this year, as well, a move seen as a positive by dealers because it should help boost residual values.

cschweinsberg@wardsauto.com