Volvo receives a $1.2 billion loan from the China Development Bank

Article by Christian Andrei, on December 16, 2012

Volvo Car Corp. will repay its present debt after it was able to negotiate a 922 million euro ($1.2 billion) loan from the China Development Bank. The Chinese-owned automaker also seeks more financial assistance for the investment it requires to double auto sales. Volvo made the announcement about the loan last Thursday.

Because of the declining demand in Europe, Volvo had to trim down its output at its primary plants. Volvo spokesman Per-Ake Froberg said that under the loan agreement, the next step will have the company securing credits that will help fund investments that total to $11 billion, about 50% of which will be used to upgrade production in Sweden.

Volvo intends to make an $11 million investment as it seeks to achieve double its total sales to 800,000 vehicles by 2020. He said that the company is in development of a totally new vehicle architecture that will be crucial and that will have to be financed. In 2010, Zhejiang Geely Holding Group bought Volvo from Ford Motor Co.

Volvo believes that the investment will reduce costs and increase the likelihood that it will avoid the impact of the market downturn. Last week, newly appointed CEO Hakan Samuelsson said that he didn’t see any positive signs in the European market but that North America is "coming back."

He also said that China continues to report growth but at a slower rate. The first loan is set to mature in 2020. Separately, Sweden's debt office announced that Volvo Car had paid back a loan from the European Investment Bank in advance after inking the deal with China Development Bank.

Topics: volvo, china

If you liked the article, share on:

Comments

Login or Create new account to add a comment!

Recommended

Nikola Motor’s hydrogen-powered semi-trailer truck is highly appealing with its many advancements but don’t expect it to arrive in the near future. In November 2016, Toyota announced the possibility of...
by - December 5, 2016
Usually, it is up to resourceful spy photographers to take clear pictures of vehicle prototypes, especially those that have aroused a lot of interest. The same is true for Project...
by - December 5, 2016
The much-anticipated debut of the new Wrangler will surely happen. As it approaches, we’ve gathered all the latest information released so far. Of course, most are expecting that the next...
by - December 5, 2016
Nissan has announced the pricing for its new commercial pickup line. So for those who have been waiting for Nissan’s official price list (plus a little more info), read on… ...
by - December 5, 2016
Sorry folks, the AMG-fied Mercedes-Benz X-Class will remain in the fantasy world. According to some news, the AMG big boss has finally spoken up about why an AMG X-Class is...
by - December 5, 2016
Facebook

Youtube Channel

Tip Us
Do you have a tip for us?
Did you film an important event?
Contact us
Newsletter
Subscribe to our newsletter!
Subscribe
Galleries