Ford says it might sell Volvo

Ford Motor is exploring the possible sale of Volvo Cars, the company said Monday.

The US automaker said it would "re-evaluate strategic options" for the Swedish brand.

It said its decision had been forced by the decline in the global auto industry and economic downturn.

"Given the unprecedented external challenges facing Ford and the entire industry, it is prudent for Ford to evaluate options for Volvo," said Ford President and CEO Alan Mulally in a statement.

One of the options includes the sale of Volvo, which is based in Gothenburg, Sweden.

Ford said the review likely will take several months to complete.

Until then, Ford will continue working closely with Volvo as it implements its restructuring plan under CEO Stephen Odell, who was appointed to lead Volvo in September.

"Volvo is a strong global brand with a proud heritage of safety and environmental responsibility and has launched an aggressive plan to right-size its operations and improve its financial results," said Mulally.

He added: "As we conduct this review, we are committed to making the best decision for both Ford and Volvo going forward."

Mulally said the strategic review was part of Ford's plans to make sure it has enough money to survive the current downturn.

Ford and Volvo will continue to put in place processes that allow Volvo to operate on a more stand-alone basis, Ford said.

Ford bought Volvo for 50 billion kronor ($6.45bn) in 1999 following a bidding war with Volkswagen and Fiat.

The brand was profitable at first, but, more recently, it has been in the red.

Sales slipped 13.5 percent to 295,634 units in the first nine months of 2008.

In the third quarter, Volvo's pretax losses widened to $458 million from $167 million a year ago.

In response, Volvo cut 6,000 jobs this year.

Despite this, Odell was positive about the brand's future. "Outstanding safety, an increased focus on environmentally friendly vehicles and contemporary Scandinavian design will continue to be the foundation upon which we will build a strong Volvo business for the future." he said in a statement.

He said Volvo has a strong presence in Europe, North America and the Asia Pacific region.

Said Odell: "We are growing in key markets such as China and Russia, where we are the leading premium brand."