Volvo wants to build a plant in North America, CEO says

Article by Christian A., on September 14, 2011

Volvo Car Corp. is considering a project to put up a plant in North America, according to CEO Stefan Jacoby. At the Frankfurt Motor Show, Jacoby told reporters that Volvo cars are exposed to the value of the U.S. dollar, and since this is seen as a “weakness,” the automaker is studying a plan to increase its sourcing in North America in order to balance currency movements.

Jacoby clarified that no decision has been made yet but the “utmost solution” would be to create an “industrial footprint” in North America.

Jacoby said that Volvo is expected to decide this year on a plan to construct a second plant in China, specifically in the city of Daqing. Volvo already has other cars in Sweden and Belgium.

Ford Motor Co. sold Volvo to Zhejiang Geely in 2010 for around $1.5 billion. It seeks to sell 800,000 cars annually by 2020, which is more than double its sales last year. Volvo is planning to invest $11 billion within the next five years to do well in markets like China.

He said that Volvo is likely to build a North American plant either with a partner or on its own, according to Autonews. Jacoby said that Volvo is generally optimistic about the future of the auto industry. It doesn’t expect the market to decline but it has prepared for the possibility, as it has boosted its financial strength and its plants are now more flexible.

Volvo, which has around 20,000 employees around the world, holds a larger share of temporary workers now than in 2008.

This enables Volvo to react more quickly in the event of a slowdown. Jacoby said that Volvo is expected to reach sales of over 400,000 units this year. In particular, Jacoby expects to sell 430,000 units. In 2011, Volvo sold 373,525 units.

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