To tap increasing demand in markets including China, Volvo Cars, plans to invest as much as $11 billion worldwide over the next five years. In a recent interview in Beijing, CEO Stefan Jacoby said that Volvo is also working to win government orders and is considering making cars in China for export.
Jacoby said the company, as a global premium brand with European heritage, has a very good opportunity to be owned by a Chinese enterprise.
Volvo was acquired by Zhejiang Geely Holding Group Co. in August 2010 for $1.5 billion. Premium marques including Volvo, Daimler AG and Audi AG are expanding in China, the world's largest automobile market and second-largest economy, as rising incomes and economic growth have boosted spending.
The Swedish brand is relying on rising Chinese demand to help double sales to 800,000 vehicles in 10 years. Yu Bing, an analyst with Pingan Securities Co. in Shenzhen, has concerns whether Volvo would be able to avoid any discounts in its brand's premium value because of the takeover by a Chinese homegrown carmaker.
Jacoby said that Volvo aims to sell 200,000 cars in China by 2015, up from 30,522 in 2010. According to the company, Volvo also plans to raise the number of its dealers in China from 106 now to more than 220 by 2015. [via autonews - sub. required]