Volvo Bets Big On Chinese Factories

volvo bets big on chinese factories

Volvo’s global sales are on a downward trajectory. The Geely-owned Swedish marker saw its 2012 global sales drop 6%. In the first four months of the year, sales were down 6.4 percent. Two new factories in China are supposed to bring the turn-around, a feature in Reuters says.

A new plant in Chengdu is “more or less completed,” a Volvo spokesman told the wire. Full production should begin in the fourth quarter in a plant good for 125,000 cars a year. A second assembly plant in Daqing is expected to come online in late 2014.

Volvo wants to reach annual global sales of 800,000 units by 2020 from 373,000 sold in 2010.

Volvo wants to profit from China’s new command-frugality that (rather ineffectually) frowns on public display of conspicuous consumption. Some drivers are cautious not to look too flashy – “which could play to Volvo’s strengths in quality and solidity,” Reuters says.

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  • Corey Lewis Corey Lewis on Jun 04, 2013

    I'm not sure lack of supply is Volvo's big issue. The complaint "People aren't buying our cars, *frowny face*" isn't often countered with "Build more of them!"

  • CJinSD CJinSD on Jun 04, 2013

    A Volvo S60 T5 lease is $2,628 down, $279 a month. That's dirt cheap for anything that wants to be aspirational. Building more of what few want isn't going to build value, and building it in China will do little for brand perceptions in some markets. I know a bunch of former Volvo people that blamed Ford for every problem they had with their S60s and XC70s before swearing they'd never touch another one. Will Chinese ownership and production change their minds? I don't see it.

  • Asdf Asdf on Jun 04, 2013

    Of course Volvo bets big on *Chinese* factories, since in a few years' time there'll be no more Volvo plants left in Sweden.

  • Oelmotor Oelmotor on Jun 05, 2013

    Volvo will end up like Rover.