Volvo Car Group is planning to upgrade its vehicle lineup as it begins its bid to entice Chinese buyers away from premium carmakers like Audi and BMW. Volvo chief executive Hakan Samuelsson said that the carmaker is adding three sites in China this year and in 2014 in order to support its growth in the country.
Volvo has been struggling to restore earnings since Chinese company Zhejiang Geely Holding Group Co. bought it from Ford in 2010 for $1.8 billion. He said that Volvo is taking on a premium strategy, since they “only have a future as a high-price car producer." Volvo aims to hit breakeven at an operating level this year, boosted by new models enticing new customers.
The carmaker posted a SEK577-million ($87.1 million) loss before interest and taxes in the first half of 2013, no thanks to lower volume declines and price cuts, a sharp contrast to a SEK349 million profit in the same period in 2013.
Samuelsson expects sales to gain in 2014 as deliveries are seen to remain flat this year from the 421,951 vehicles sold in 2012. Volvo posted a 40-percent surge in sales in China in the first eight months of 2013, with significant growth posted in July and August.
The carmaker’s CEO quipped that Volvo does not need funding from its parent, while it is mulling a bond sale to finance projects like its new scalable product architecture.