Volvo preparing big investment for next-generation vehicle architecture and engines

Article by Christian Andrei, on December 5, 2012

Volvo Car Corporation has about $11 billion of planned investment, about half of which will be spent on upgrading its production facility in Sweden to reduce costs and boost its sale to avoid the impact of a weakening market. China's Geely acquired Volvo from Ford Motor Co. in 2010.

Volvo pointed out the difficult conditions it encounters in Europe while chief executive Hakan Samuelsson seems to have misgivings about the timing of its 2020 sales goal. Volvo is relying on the expected quick rise of the demand from China to increase sales by the end of the decade to 800,000 vehicles from slightly more than 400,000 presently.

Last Monday, Samuelsson said that the 2020 target will remain as they see no reason for a change. He added that Volvo needs to be bigger and so it will be.

Volvo said that it will present new simpler production methods, and have only one engine size. According to Peter Mertens, senior vice president of research and development, Volvo is dropping its Ford car architecture, which will make production simpler and would permit vehicles with various sizes to use the same platform and share some design, production, engineering and components.

He said that the company is throwing out its prior technology and developing a totally new set-up so that it will have just one engine family and two architectures on the vehicles.

Volvo presently has four architectures - or sets of engineered components - and eight engine families. Volvo’s investment in Sweden includes provision for a new line of cars such as a four-cylinder, fuel-efficient, family vehicle. Volvo aims to launch the XC90, the first car model that’s built using a new architecture, at the end of 2014.

Topics: vw, investment

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