Volvo seeks Chinese inroads
By Jin Jing |
February 26, 2011, Saturday
|
Print Edition
Print Edition
VOLVO Car Corp, owned by China's Geely Holding Group, yesterday announced it will build two car manufacturing plants in China in an effort to boost sales in the world's largest auto market.
The plant in Chengdu, Sichuan Province, will start operations in 2013 with an annual capacity of 100,000 units, said Freeman Shen, president of Volvo China.
As part of its China strategy over the next five years, another manufacturing plant will be built in Daqing, Heilongjiang Province, to cover the northern market, he added.
Volvo also said it will invest US$10-US$11 billion worldwide over the next five years. CEO Stefan Jacoby said that will pay to develop a new vehicle platform and power train and to expand Volvo's China presence.
Volvo plans to raise part of the cash for its investment plans in China by drawing on its Geely ties, Jacoby said. He said the car maker is also raising money from European investment banks and the government of Belgium, where it has a factory.
Following the announcement last month that a Chinese headquarters and an engineering center will be built in Shanghai, the plan for the Chinese factories was another milestone in Volvo's expansion in China after Ford Motor Corp sold the Swedish auto maker to Geely in August.
The US$1.8 billion deal is the largest acquisition in the history of China's auto industry and means a Chinese company owns a global luxury car brand for the first time.
"China is the second home-market for Volvo," Jacoby said. "It's also key to the successful future of Volvo,"
The car maker has set an annual sales target of 200,000 units in China by 2015, with a 20 percent share of the nation's luxury car market.
Globally, Volvo is vying to remain profitable and sell 800,000 units in 2020 by strengthening sales in the American and European markets.
A local production facility in China is crucial for Volvo to boost presences and improve pricing competitiveness against other rivals such as Mercedes-Benz and BMW, which have already seen good sales. Industry analysts said having the Chinese plants would help sustain growth for Volvo.
Last year, Volvo sales rose 36 percent to 30,522 units in China, though it still lagged far behind Audi's 220,000 units, BMW's roughly 170,000 and Mercedes-Benz's more than 140,000.
Shen said Volvo plans to have 220 dealers in China by 2015, up from the present 106. Its new engineering center in Shanghai will not only focus on high-end cars, but also electric and hybrid technologies. About 1,000 engineers will be hired over the next couple of years.
Volvo expects China's luxury car market to continue to grow at double-digit rates to reach 1.3 million units by 2015, thanks to the increase in wealthier middle-class consumers.
The choice of Chengdu as the site of its first plant in China was also took into consideration the shift of sales from costal areas to inland China.
Li Shufu, chairman of Volvo Car Corp and the head of the privately-owned Geely, reiterated the principle of running Volvo and Geely separately.
The plant in Chengdu, Sichuan Province, will start operations in 2013 with an annual capacity of 100,000 units, said Freeman Shen, president of Volvo China.
As part of its China strategy over the next five years, another manufacturing plant will be built in Daqing, Heilongjiang Province, to cover the northern market, he added.
Volvo also said it will invest US$10-US$11 billion worldwide over the next five years. CEO Stefan Jacoby said that will pay to develop a new vehicle platform and power train and to expand Volvo's China presence.
Volvo plans to raise part of the cash for its investment plans in China by drawing on its Geely ties, Jacoby said. He said the car maker is also raising money from European investment banks and the government of Belgium, where it has a factory.
Following the announcement last month that a Chinese headquarters and an engineering center will be built in Shanghai, the plan for the Chinese factories was another milestone in Volvo's expansion in China after Ford Motor Corp sold the Swedish auto maker to Geely in August.
The US$1.8 billion deal is the largest acquisition in the history of China's auto industry and means a Chinese company owns a global luxury car brand for the first time.
"China is the second home-market for Volvo," Jacoby said. "It's also key to the successful future of Volvo,"
The car maker has set an annual sales target of 200,000 units in China by 2015, with a 20 percent share of the nation's luxury car market.
Globally, Volvo is vying to remain profitable and sell 800,000 units in 2020 by strengthening sales in the American and European markets.
A local production facility in China is crucial for Volvo to boost presences and improve pricing competitiveness against other rivals such as Mercedes-Benz and BMW, which have already seen good sales. Industry analysts said having the Chinese plants would help sustain growth for Volvo.
Last year, Volvo sales rose 36 percent to 30,522 units in China, though it still lagged far behind Audi's 220,000 units, BMW's roughly 170,000 and Mercedes-Benz's more than 140,000.
Shen said Volvo plans to have 220 dealers in China by 2015, up from the present 106. Its new engineering center in Shanghai will not only focus on high-end cars, but also electric and hybrid technologies. About 1,000 engineers will be hired over the next couple of years.
Volvo expects China's luxury car market to continue to grow at double-digit rates to reach 1.3 million units by 2015, thanks to the increase in wealthier middle-class consumers.
The choice of Chengdu as the site of its first plant in China was also took into consideration the shift of sales from costal areas to inland China.
Li Shufu, chairman of Volvo Car Corp and the head of the privately-owned Geely, reiterated the principle of running Volvo and Geely separately.
- About Us
- |
- Terms of Use
- |
-
RSS - |
- Privacy Policy
- |
- Contact Us
- |
- Shanghai Call Center: 962288
- |
- Tip-off hotline: 52920043
- 沪ICP证：沪ICP备05050403号-1
- |
- 互联网新闻信息服务许可证：31120180004
- |
- 网络视听许可证：0909346
- |
- 广播电视节目制作许可证：沪字第354号
- |
- 增值电信业务经营许可证：沪B2-20120012
Copyright © 1999- Shanghai Daily. All rights reserved.Preferably viewed with Internet Explorer 8 or newer browsers.
