Ford Dumps Familiar Names; Invests in Obscure Romanian Firm
July 17, 2007

Maybe it makes sense, but it seems ironic. Ford has sold Aston Martin, put Jaguar and Land Rover on the auction block and may be selling Volvo.

At the same time it ditches these famous marques, Ford is investing in a Romanian carmaker most of us, even in the auto business, have never heard of. Ford said Monday it plans to invest $930.6 million for a majority stake in Automobile Craiova. That's about $100 million more than Ford received for selling almost all of Aston Martin; Ford has maintained a tiny piece of the British luxury maker.

Ford says it plans to boost employment to between 7,000 and 9,000 people from the current 3,900 and, by year-end, increase vehicle output to 300,000 units from a scant 24,000 last year.

Romania is one of the hot emerging markets for auto sales. New car sales rose 25 percent in the first six months this year. Renault’s small, cheap Dacia is the market leader.

It's almost guaranteed Ford will get the Romanian plant -- it submitted the sole bid for a 72.4 percent stake of the plant in a sale that the government hopes to wrap up by September 1. That plant was previously owned by Korean automaker Daewoo before it went bankrupt.

Posted by Michelle Krebs at 7:56 AM under Commentary , Ford , News | Comments (0) | digg this | Seed Newsvine