Volvo's Already Shuffling Production to Avoid Tariffs

volvos already shuffling production to avoid tariffs

Unlike Volvo’s S90 sedan, which is built half a world away from its V90 wagon stablemate, the Chinese-owned Swedish automaker has some flexibility in where it sources its XC60 crossover. Two plants — one in China, one in Torslanda, Sweden — crank out the second-generation utility vehicle, but the U.S. market gets its full share from the Orient.

After the Trump administration imposed a tariff of 25 percent on Chinese-built vehicles, Volvo’s XC60 suddenly found itself dragging a financial anchor. Hardly a great situation for a model that outsold all other Volvos in the U.S. last month. To side-step the tariff, Volvo’s already making changes.

Say goodbye to the Chinese XC60.

According to Reuters, U.S.-bound XC60s will no longer hail from Sweden, leaving the S90, which has no other production facility, as America’s sole Chinese Volvo.

“We will of course reshuffle here and take XC60s for the U.S. … from our factory in Europe, and let China produce for other markets,” said Volvo Cars CEO Hakan Samuelsson. The shift is already underway, he added.

Some of the XC60s already on U.S. soil will be shipped to Europe to avoid unnecessary costs. “That’s the sort of fine-tuning we can do within our production process,” Samuelsson said.

Volvo recently opened its first U.S. assembly plant near Charleston, South Carolina. That facility will serve as home to the S60 sedan, as well as the next-generation XC90. With tariffs already in place between the U.S. and China, and with President Trump rattling the tariff sabre at Europe, Volvo feels the need to “ramp up Charleston as fast as we can,” Samuelsson told Automotive News Europe.

That said, the CEO claims he’s taking a wait and see approach on tariffs before considering adding the S90 to Charleston. Elsewhere in the brand’s lineup, the small XC40 crossover hails from Belgium, while the V60 wagon ( revamped for the 2019 model year) sees assembly in both Sweden and Belgium.

In June, the XC60 outsold the XC90 in the U.S. by 77 vehicles, returning a monthly tally of 3,306 vehicles. The XC60’s 14,551 year-to-date sales falls just below the XC90’s volume.

[Image: Volvo Cars]

Comments
Join the conversation
2 of 33 comments
  • Snickel Fritz I just bought a '97 JX 4WD 4AT, and though it's not quite roadworthy yet I am already in awe of it's simplicity and apparent ruggedness. What I am equally in awe of, is the scarcity of not only parts but correct information regarding anything on this platform. I'm going to do my best to get this little donkey back on it's feet, but I wouldn't suggest this as a project vehicle for anyone who doesn't already have several... and a big impressive shop with a full suite of fabrication/machining/welding equipment, and friends with complimentary skillsets, and extra money, and... you get the idea. If you don't, I urge you to read up on the options for replacing anything on these rigs. I didn't read enough before buying, and I have zero of the above suggested prerequisites... so I'm an idiot, don't listen to me. Go buy all of 'em!
  • Bryan Raab Davis I actually did use the P of D trope, but it was only gentle chiding, for I love old British cars of every sort.
  • ScarecrowRepair The 1907 Panic had several causes of increased demand for money:[list][*]The semi-annual shift of money between farms and cities (to buy for planting and selling harvests)[/*][*]Britain and Germany borrowing for their naval arms race[/*][*]San Francisco reconstruction borrowing after the 1906 earthquake and fire[/*][/list]Two things made it worse:[list][*]Idiotic bans on branch banking, which prevented urban, rural, and other state branches from shifting funds to match demands. This same problem made the Great Depression far worse. Canada, which allowed branch banking, had no bank failures; the US had 9000 failures.[/*][*]Idiotic reserve requirements left over from the Civil War which prevented banks from loaning money; they eventually started honoring IOUs illegally and started the recovery.[/*][/list]Been a while since I read up on it, so I may have some of the details wrong. But it was an amazing clusterfart which could have been avoided or at least tamed sooner if states and the feds hadn't been so ham handed.
  • FreedMike Maybe this explains all the “Idiots wrecking exotic cars” YouTube videos.
  • FreedMike Good article! And I salute the author for not using the classic “Lucas - prince of darkness” trope, well earned as it may be. We all know the rap on BL cars, but on the flip side, they’re apparently pretty easy to work on (at least that’s the impression I’ve picked up). On the other hand, check the panel fits on the driver’s and passenger’s doors. Clearly, BL wasn’t much concerned with things like structural integrity when it chopped the roof off a car designed as a coupe.
Next