Volvo Cars gains market share after 'the darkness'

Volvo Cars, the Swedish automaker that Geely Holding Group Co. wants to buy from Ford Motor Co., is gaining market share as the industry shows signs of recovering from the global recession.

"We stood on the precipice and looked down, and we were scared, and then we fell in," said Chief Executive Officer Stephen Odell in an interview today in Stockholm. "We learned that we could survive in the darkness. Our sales are tracking above industry improvements."

Volvo plans to produce 95,000 vehicles in the fourth quarter, ramping up production from 77,000 in the third quarter as demand increases. The company expects to maintain this level of production through next year and has the capacity to increase manufacturing if demand improves, Odell said.

Ford, the only major U.S. automaker to avoid bankruptcy, is selling its international luxury lines to focus on its namesake brand as Chief Executive Officer Alan Mulally wants to return the Dearborn, Michigan-based company to profitability by 2011.

Volvo reported a pretax operating loss of $135 million in the third quarter, compared with a loss of $458 million a year earlier, Ford said on Nov. 2. It sold 4,437 vehicles in the U.S. in October, a 19 percent increase from the year before as the worst recession in decades comes to an end and buyers begin to purchase new cars.

No Specific Timeline

"We have done, as I can see it today, the majority of the cost actions we have to take," Odell said. "Now we have to launch products."

Odell declined to comment on Ford's Oct. 28 announcement that it had narrowed talks on the sale of Volvo to one bidder, China's Zhejiang Geely Holding Group Co.

Ford said at the time that it hadn't made a final decision and has "no specific timeline" to conclude the discussions.

Ford managed to forgo emergency government loans and stay out of bankruptcy after borrowing $23 billion in 2006, before credit markets seized up last year.

Geely is prepared to pay about $2 billion for Volvo, less than a third of Ford's purchase price a decade ago, people familiar with the talks have said.

Konsortium Jakob AB, the Swedish investor that also wants to buy Volvo Cars, said today it's still working on an offer even as time is running out.

"We are still working on the plan, but there is a sense of urgency," said Jakob spokesman Ola Johansson in a phone interview.

Odell said Ford is committed to executing Volvo's sale.

General Motors Co., the largest U.S. automaker, voted to scrap the planned sale of a majority of the money-losing European Opel division to Canada-based auto-parts maker Magna International Inc. and Russian lender OAO Sberbank on Nov. 3.