Volvo Car Corporation, owned by Zhejiang Geely Holding Group, outlined its plans for strategic expansion in China, which President and CEO Stefan Jacoby called the company’s second home market. Among the steps to be taken as part of its new 5-year plan in the country is building a new plant in the city of Chengdu and also continuing investigations for a plant in Daqing.
Also as part of the plan, Shanghai will serve as Volvo Car China headquarters and center for product development, design and sourcing. Among other priorities, Volvo Car China will also support Volvo Corporation R&D in Sweden regarding the development of electric vehicles and hybrids.
We regard the Chinese market as the second home market for Volvo Car Corporation and a very important part of the plan to build a successful future for the company. We are increasing our business presence in China from a national sales company to an organization with all functions necessary to manage our operation in China. Our aim is to reach a sales volume of about 200,000 cars in the Chinese market by 2015.
—Stefan Jacoby, President and CEO of Volvo Car Corporation
In August 2010, Zhejiang Geely Holding Group became the new owners of the Volvo Car Corporation. Global retail sales during 2010 reached 373,525, an increase of 11.2% compared to 2009.
Every quarter of 2010 showed a positive financial result, which gave a full-year result that was better than expected.
To achieve the next five-year growth plan in China, the Board and the Executive Management Team have made the following decisions:
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Volvo Car Corporation will, pending the approval of the Chinese authorities, build a manufacturing plant in Chengdu, 1,600 km west of Shanghai. The plant will produce only Volvo cars. The plant is based upon a business case of approximately 100,000 produced cars annually and production is estimated to start during 2013.
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The expansion in China will not affect operations and employment in Europe.
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The board also approved a decision to continue investigating the opportunities for establishing a plant in Daqing in north-eastern China.
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Shanghai will serve as Volvo Car China headquarters and centre for product development, design and sourcing. Among other priorities, Volvo Car China will also support Volvo Corporation R&D in Sweden regarding the development of electric vehicles and hybrids.
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Volvo Car Corporation puts full focus on increasing sales in China and strengthens sales and marketing activities, including expanding dealerships from 106 to 220 by 2015, train sales consultants and improve customer experience and satisfaction.
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Volvo Car Corporation will optimize its sourcing network in China for the global market.
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Volvo Car China will start to employ new staff to work with product development for the Chinese market and support local production and purchasing.
Lars Danielson, previously General Manager of the Volvo Torslanda Plant, has been appointed Vice President of Industrial Systems including manufacturing and quality. Lars Danielson is based in Chengdu and is currently planning the complex work involved in constructing a new Volvo plant in the region.
At our plants in China we will ensure that Volvo’s global manufacturing and quality system can be thoroughly implemented. The Volvo Car China Technology Centre in Shanghai will develop into a complete product development organization on an international level. It will have the competence and capacity to work together with the HQ in Sweden, participating in Volvo Car Corporation’s work process for developing entirely new models.
—Volvo Car Corporation SVP & China Operations Chairman Freeman Shen
Jacoby said that Volvo will continue to be a contemporary luxury brand; its key strategy for Volvo Car Corporation is to continue to strengthen its business presence in mature markets such as Europe and America while proactively exploring new emerging markets.
We continue to uphold our principle that Geely is Geely and Volvo is Volvo.
A more globalized, more focused luxury brand will turn our vision of a growing and profitable Volvo Car Corporation into reality. The company will continue to contribute to the development of the global automotive industry by introducing world-first innovations that make an outstanding brand win in the marketplace.—Li Shufu Chairman of the Board