DaimlerChrysler, parent car maker of Mercedes-Benz, has signed the papers for their corporate divorce while their strong rival BMW is intending to launch a takeover bid for Volvo captured as revealed by Autocar. It may be noted that many analysts have expressed their concern over mergers within the auto industry saying that it’s not practical. But it appears as though BMW just do not want itself to become daunted by the amount of unsuccessful mergers in the market and chosen over personally go through it.
Anyway, the Bavarian car maker and producer of top quality BMW exhaust have previously asked for an entire introduction to Volvo’s budget from the European investment bank that is handling enquiries with respect to Ford, who owns Volvo. Reliable sources also have says BMW has earlier eyed the Alfa Romeo since it’s takeover target.
Based on skillfully developed BMW is intending to expand its selection of brands to aid the long run development of the organization. Likewise, a part of its plan’s underpinning the leading-wheel-drive Small division by growing its output also it can achieve this with the aid of Volvo.
Why Volvo? Company bosses at BMW saw Volvo because the fitting global brand complimentary to BMW, that they considered has considerable room for growth and room to support Volvo. Although BMW will invariably highlight driving pleasure, Volvo however will lead safety and ecological concerns towards the mix.
At the moment it not obvious what BMW plans are nevertheless its probable the bigger saloon and estate types of Volvo just just in case could be switched to BMW platforms offering both rear-and 4-wheel drive. The smaller sized cars within the Volvo’s range would continued to be front-drive and would most likely be merged towards the Small family growing this model range.
The Small brand is presently among the greatest problems of BMW and contains recently been made to allot additional investment only for the redesigning from the new Small in addition to engineering the Small Clubman estate. But despite all of the efforts Small sales continue to be lower on their own 2005 peak and also the BMW associates admit that the total annual creation of 250,000 to 270,000 cars is simply not enough to have a lucrative lengthy-term future for that Small brand.
Potentially with Volvo, BMW could build the suggested large five-door Small and Small Sports utility vehicle on a single front-drive chassis because the future S40 and V50. And let us just say with regard to argument this ended, a yearly creation of 500,000 upmarket Volvo and Small front-drive cars could ensure lengthy-term profitability.
The expectation for future profit isn’t new with regards to merger actually all of individuals unsuccessful union within the auto market is wishing for the similar factor this is exactly why they merge to begin with. Regrettably, none of individuals merges survive aside from the seven years partnership between Nissan and Renault but even their union continues to be uncertain and no-one knows what can happen later on.
And let’s remember that seven years back BMW was humiliated if this incurred massive deficits which forced it to part ways then sell the Rover Group so it bought in 1994. The issue now’s: Has BMW forgets the training of history or has it many userful stuff here to produce a new effective partnership? Well only BMW can answer that.