Ford To Keep Volvo, Move Brand Upscale And Into Diesel-Electric Hybrids?

After parading Volvo through every private equity firm and flea market, Ford Motor Company is now, as expected, planning to hold on to the Swedish automaker. But Ford CEO Alan Mulally's commitment to Volvo isn't unconditional. Ford wants to shape Volvo into a true luxury brand to rival companies like BMW, Mercedes-Benz and Lexus. Oh, and they want the company to make money, too. Experts say that Volvo already has an idyllic company image with extremely high brand loyalty. But Scandanavian design and a reputation for safety have never been enough to draw in the masses: Volvo has never sold more than 500,000 vehicles in a year. In redeveloping the company, Ford knows that maintaining Volvo's image will be the most important and challenging task.

Executives see premium Volvos with better fit and finish, high-end interior materials, innovative safety features and green technologies. One idea has Volvo leading the charge on diesel-electric hybrids. While Ford execs are taking a hard line with Volvo, it's clear that both companies need each other. As a money-losing operation, Volvo relies on Ford to stay afloat. Ford now significantly relies on Volvo engineering for safety features and vehicle platforms. [The Detroit News]