Ford supportive of Volvo brand, Volvo CEO says

Ford Motor Co. is committed to keeping its Volvo brand even as it spins off another luxury brand, the Swedish unit's CEO said today.

"Ford is very supportive when it comes to the development of Volvo cars," Volvo CEO Fredrik Arp said, speaking in Geneva at an event to mark the launch of two redesigned models, the V70 wagon and the XC70.

Arp said he speaks with Ford CEO Alan Mulally every week and added that Mulally had indicated his commitment to Volvo in a recent visit to the Swedish automaker's headquarters.

"He visited us a few weeks ago and he was very supportive of developing the brand and developing the products going forward," Arp said of Mulally.

Volvo is part of Ford's Premier Automotive Group, which includes the Aston Martin, Jaguar and Land Rover brands.

Ford, which lost $12.7 billion last year, is in the process of selling its Aston Martin luxury unit this year and there had been speculation Ford would look to sell other assets to shore up its liquidity.

Ford is targeting a return to profitability in North America -- its largest market -- by 2009.

Ford's European division and the PAG unit are expected to be profitable in 2007, Lewis Booth, head of Ford's European operations said today.

Arp said Volvo was "absolutely" a part of the Ford family of brands and had the support it needed to continue its own vehicle development efforts.

Arp said Volvo would work with Ford's other luxury brands and Ford itself on sharing components and spreading the cost of technological development in areas such as hybrid vehicles, but added that Volvo would not share platforms.

"We have a very good situation here because we extract scale economy when it's appropriate and we extract technology when it's appropriate," Arp said. "But you won't see us compromise on our brand identity and we're very attuned with Ford on that."

Separately, Arp said Volvo expected stronger sales this year in both China and Russia, two of the fastest growing markets for luxury car makers.

Volvo sold nearly 8,000 cars in China in 2006, even though it faces an import duty that adds 25 percent to the sticker price of its vehicles there.

Russian sales for Volvo more than doubled to over 11,000 vehicles, he said.

"I think we will have excellent developments in both markets in this year," he said.