Future unknown

New York, July 1 (Reuters): Ford Motor Co has had exploratory talks with French car maker Renault SA to sell Volvo, but the talks ended quickly because of price differences, sources said.

The two parties have spoken again after their initial discussions, which were held less than a year ago, the sources said.

Ford also had talks with China’s third-largest auto maker Dongfeng Motor Group as a potential partner for Volvo, one of the sources said.

Ford spokesperson Mark Truby declined to comment directly but said, “We had announced earlier this year that Volvo was not for sale and that we were focused on improving Volvo’s business results.”

Even though Ford has said it has no plans to sell Volvo, the company has been holding informal talks with interested parties, the sources said.

In March, Ford said it was developing a plan that would help Volvo operate on “a more standalone basis”.

Analysts have said Ford, which lost more than $15 billion in the past two years and has abandoned a long standing goal of returning to profitability in 2009, could do with the extra cash.

The car maker has already sold Aston Martin, Jaguar and Land Rover, disbanding the Premier Automotive group, whose only remaining brand is Volvo. The Dearborn, Michigan-based auto maker is in the middle of a restructuring that includes closing 16 North American plants and slashing tens of thousands of jobs, and mortgaging its assets in 2006 to secure about $23 billion in financing to help fund its turnaround.

Ford did not reveal the results for Volvo, a Swedish brand it bought for $6.45 billion in 1999. But it has said the unit had lost money in 2007 and it wrote down the value of Volvo by $2.4 billion following a review of the brand’s prospects in January.

Dongfeng already has a joint venture with Japan’s Nissan Motor Co, in which Renault owns a 44 per cent stake. The joint venture makes cars for the Chinese market. Separately, Dongfeng also has a joint venture in the works with Volvo AB, which makes heavy trucks and operates independently of Ford.

The Chinese auto firm has been gearing up to expand its passenger car and light truck line up. The Hubei-based company has its roots in building trucks and commercial buses.

Billionaire investor Kirk Kerkorian, who earlier this month increased his stake in Ford to 6.5 per cent and said he could step in to propose business strategies for Ford, could also be a bridge to more serious talks with Renault.

Kerkorian, a long-time investor in the auto industry, had built up a stake in General Motors three years ago and suggested an alliance with Renault-Nissan, which the latter rejected.