Volvo chief: Europe is in a recession - Volvo will merge with Fiat?

Volvo Car Group President and CEO Stefan Jacoby said the carmaker is more robust and has more flexibility now despite current challenging market conditions compared to two years ago when China’s Geely had just purchased the company.

What most likely spurred these talks seems to be the European auto market current down period. It shouldn’t come as a surprise to anyone who watches the News regularly that the European economy is in a bad recession. As we know if there is a recession, car buying goes in the toilet.

Therefore Fiat wants to find some automaker to share and cut costs with. The solution could be Volvo it seems. Fiat’s CEO, Sergio Marhionne, has reportedly been in talks with Volvo. “I’m very interested in talking to everyone that wants to talk to me” said Marchionne when speaking with British automotive magazine Autocar , who initially reported the possibility of the partnership,when asked about a partnership with Volvo during the Geneva Motor Show On the Volvo side, “We are open for partners,” said Volvo’s chief executive Stefan Jacoby several months ago.

“We are open for collaboration in a win-win situation for sharing platforms, for sharing engines and for a general higher scale of economics.” Essentially this means that Volvo needs to find a small car platform, which it currently does not have.

There is the Volvo V40 in the the lineup, but that doesn’t compete with cars in the subcompact market like the Toyota Yaris and Honda Fit. I imagine this is where Volvo feels it now desperately needs a new model range.

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