Volvo to start producing cars in China this month

Article by Anita Panait, on June 5, 2013

Volvo Cars will commence building cars at its first production plant in China this month. This means that Volvo, a unit of Chinese company Zhejiang Geely Holding Group Co., could now avoid paying a 25-percent tariff for imported vehicles in the country and become competitive in terms of prices. Volvo so far had imported cars from overseas or had built them in limited numbers at Ford’s Chongqing site in China.

Zhejiang Geely had thought it could quickly and easily open a new plant for Volvo in China, considering that it is a Chinese-owned company. But the Chinese government still subjected Volvo to the same regulatory approval procedures as all foreign carmakers, and the Swedish brand had to wait for three years before it could open its first plant in the country. Despite this miscalculation, the opening of the new plant would allow Volvo to double its sales in China to 800,000 by the end of the decade.

Lin Huaibin, an analyst at IHS Automotive, told Bloomberg that if Volvo fails in China, he doesn’t see where the carmaker can gain volume significantly. He noted that if Volvo can “do China right,” it would gain strong momentum. Volvo logged a loss in 2012 after its global sales dropped 6.1 percent to 421,951 units, suffering the biggest fall in its home market, Sweden.

Volvo saw its sales in China fall 11 percent, in contrast to Audi and BMW which posted surges of 40 percent and 30 percent, respectively. Dismal sales in the country lead to a fall of the carmaker’s share of the Chinese luxury vehicle market from 5.3 percent in 2009 to 3.4 percent, according to estimates at IHS Automotive. The carmaker’s decline in China could be attributed to the prices of its products, which are typically higher than those of its competition. [source: automotive news - sub. required]

Topics: volvo, china, production

If you liked the article, share on:

Comments

Recommended

Earlier this week, Nissan revealed a teaser of the new 2018 LEAF’s interior, giving us an idea of what the electric vehicle has to offer. The company released a video...
by - June 25, 2017
The primary suggestion of a 4x4 ute from French company Peugeot was first revealed in 2016. Fifteen months later, the production version is launched. Now, Peugeot is not shying away...
by - June 24, 2017
The new Jaguar E-Pace crossover will soon hold its official launch on July 13 and is expected to arrive at the showrooms by early next year. It couldn’t have come...
by - June 24, 2017
As prices of the original Shelby Cobra have skyrocketed into astronomical proportions, there are firms like Superformance that serve replicas to consumers who demand the same levels of performance at...
by - June 24, 2017
New and improved 2018 Subaru Legacy comes packed with a number of upgraded features from the get go - from the exterior to the interior. And the company has finally...
by - June 23, 2017
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