Almaty, Jan 30

(THE GLOBE)

�The link Ford-Volvo is the best of duets ever thought to strengthen positions in the world market and use mutual complementary advantages of both parties�, said an official representative of Volvo in Kazakstan. In the exclusive interview to THE GLOBE the next day after declaration of the $6.45 bln deal on purchase the Volvo-Cars by the Ford Motor Company Karl Gustafsson said, �it is an excellent news to all the people related to Volvo: shareholders, Volvo cars owners, employees of both firms.� The Volvo headquarters and its trademark will be maintained, he said. As is known, the Volvo concern, one of the world best, had been searching for a partner for a long time. Having gained goo image and serious authority, having good organization and significant human resources, producing about 400,000 cars a year (26 position in the world), Volvo needed a significant capital to strengthen its positions in the market. And Ford, in its turn, customer-oriented since the very beginning, gained another diamond in its crown � Volvo, which is very strong in the lux- and family-class vehicle sector.

Mr. Gustafsson drew attention to a number of recent similar merges in the car industry: Daimler-Chrysler, Volkswagen � Skoda � Rolls, General Motors � SAAB, BMW � Rover.

�As for Volvo in Kazakstan � we reduced significantly the tariffs for service, spare parts, and today our prices are rather moderate and competitive�, said Karl Gustafsson, �our repair is of a high quality because Swedish Motors, a Company operating in Kazakstan, 100% belongs to mother Company Volvo-AB.�

�The work-shop services mainly Volvo cars. As for the cars served at the body-shop and painting shop, they are 60% of lux-class vehicles of other makes. As is well know, Volvo service is the best in the city�, he claimed.

�The Volvo headquarters focus on manufacture of trucks, vans, construction equipment, ship engines, and aerospace equipment�, says the press release issued by the Company on January 28. Karl Gustafsson has been working in Kazakstan since November 1996. Under him Volvo AB purchase out 100% shares of the Swedish Motors. In 1978 � 1981 he was General Manager of IBM in Scandinavia (Sweden, Norway, Finland, and Denmark). Since 1981 he has been working in Volvo: till 1988 he was Marketing Vice-President (Marketing Parts World Wide), from 1988 to 1994 he was Volvo General Manager in Switzerland. In 1994 he established and headed a representative office on fleet sales in the North America and now runs sales of specific cars (about 35% of sales in the North America is a wholesale to large organizations).

DEARBORN

Michigan, Jan 28 (AFP)

Ford�s acquisition of Swedish automaker Volvo will strengthen the US giant�s European operations and make it a more prominent global player in the rapidly changing automotive market.

The 6.45 billion dollar deal, if approved by Volvo shareholders, will enhance Ford�s position in the European marketplace, its product line, and its depth in research and development.

The immediate effect will be to catapult the US automaker to second place in the European market place with a combined market share of almost 12 percent.

The new company will be second in the European pecking order behind Volkswagen, but it secures a lead on its rival General Motors.

It will also broaden the product line of Ford, which has a controlling interest in Japan�s Mazda as well as Britain�s Jaguar and Aston-Martin.

Until now, Ford, the world�s second largest automobile player behind General Motors, has been struggling to eke out a profit from Europe.

In 1998, Europe accounted for a mere three percent of the group�s profits � some 193 million dollars.

The founding father of the automobile industry was losing money in its bid to carve out a niche in the highly competitive small and medium-sized car market.

But with Volvo on board, Ford will be in a much stronger position in the luxury car niche, which is key to winning over European consumers.

Ford president and chief executive Jacques Nasser said Thursday he expects Ford�s luxury brand vehicle sales to increase from its current 200,000 a year to about 700,000 by 2000 following the deal.

Sales could reach a million early in the next century, with the growth in all of Ford�s luxury brands, plus the addition of new models, including Volvos, Nasser said.

For this reason, the acquisition of Volvo � which has a 1.6 percent market share � is a perfect strategic fit, according to Nasser.

He noted that one in two Volvo owners are women, while the profile of owners of Ford brands (Lincoln, Jaguar) is predominantly male.

Another strategic consideration driving the deal was the need to leverage research and development costs against larger sales volumes.

Nasser notably remarked at the last Detroit Auto Show that a manufacturer turning out less than a million units per year could not survive on its own.

For its part, Volvo was concerned about how to meet the technological challenges of the next seven to eight years, particularly environmentally friendly and energy-saving fuel cells.

�Those were areas of concern as we reviewed our strategy,� said Leif Johansson, president of AB Volvo, in a joint press conference from Sweden.

Many operational details have yet to be resolved, including whether to manufacture Volvo models in the United States, according to Ford.

�Ford has shown the ability for embracing different cultures, different brand values and nurturing and allowing them to grow,� said Nasser.

But with six existing brands, the company has committed itself to a hands-off strategy, which will allow Volvo to grow under the Ford umbrella.

�The worse thing we can do is get in there with a flurry of activity and change things, particularly when it isn�t broken,� said William Ford Jr., chairman of the company.

Some Wall Street analysts have expressed concern at the price Ford paid for Volvo � which is regarded in Sweden as a national institution.

But the cash-rich US giant � the most profitable auto company in the world today with annual sales of 144 billion dollars � insisted the deal would pay off in the long term.

With about 25 billion dollars in cash, Ford could pick and choose the partner it wanted.

�The great thing about Ford is we have the ability to chart our own future. We do not need to merge into a safe haven with anybody,� said Ford.

Almaty, Feb 1 (THE GLOBE)

Karl Gustavsson, the General Director of Swedish Motors told THE GLOBE that Serik Burkitbayev, the Republic of Kazakstan Minister of Transport, Communication, and Tourism had left for Goteberg, Sweden, where a large range of matters would be negotiated including the opportunity to assembly buses in Astana. Volvo Car Corporation in 1998 purchased 13% of Scania shares. Volvo is about to place second in terms of manufacture of trucks and buses. The Corporation has invested $6.45 in the main production.