Volvo secures $261 million loan from Flemish state to fund Belgium production

Article by Christian Andrei, on December 15, 2010

To help cement the future of Volvo Car Corp.’s Ghent plant in Belgium, the carmaker has secured a 198 million euro ($261 million) loan supported by the Flemish regional government.

In a statement, Volvo CEO Stefan Jacoby said that the loan secures investments and jobs in Ghent and gives Volvo Car Corporation with funding stability for car projects in its Belgian factory. After posting a pretax loss of $653 million in 2009, it’s apparent that Volvo needs major investment to return to profit.

Last October, Volvo had said it had made an operating profit in the third quarter of 2010. No details were given but Volvo claims to have been profitable since the start of 2010.

Volvo believes that its performance is being helped by strong demand for the XC60, its top-selling crossover SUV model that is made at the facility.

Zhejiang Geely, parent of Geely Automobile Holdings completed its purchase of the Volvo brand from Ford Motor Co. this year.

Geely believes that China is key to Volvo's goal of doubling sales to 800,000 cars in 10 years. Jacoby said last October that Volvo may require up to three plants in China. [via autonews - sub. required]

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