Executive Briefings

Could Volvo's Fortunes Revive Under Chinese Control?

Conventional wisdom suggests that the latest attempt to revive Volvo as an automotive brand faces very long odds. Under the umbrella of its corporate parent Geely, the Chinese automaker, Volvo's 450,000 annual sales aren't self-sustaining.

Could Volvo's Fortunes Revive Under Chinese Control?

But Geely's ownership of the onetime Swedish automaker could prove to be a valuable wild card if Volvos built at a new plant in Chengdu, China, capture the fancy of Chinese buyers first, and then, perhaps, buyers abroad. Geely hopes eventually to sell 200,000 Volvos annually in China, maybe 140,000 in the U.S., and 800,000 a year globally by 2020.

If Geely's Chengdu plant is successful, some cars built in that country might be exported to the U.S. and elsewhere, presumably at a cost basis that could make them highly competitive in price with other cars in the premium category. In the meantime, Volvos sold in the U.S. continue to be imported from Europe.

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Keywords: automotive industry, U.S. auto imports, China auto sector, supply chain management, logistics & supply chain

But Geely's ownership of the onetime Swedish automaker could prove to be a valuable wild card if Volvos built at a new plant in Chengdu, China, capture the fancy of Chinese buyers first, and then, perhaps, buyers abroad. Geely hopes eventually to sell 200,000 Volvos annually in China, maybe 140,000 in the U.S., and 800,000 a year globally by 2020.

If Geely's Chengdu plant is successful, some cars built in that country might be exported to the U.S. and elsewhere, presumably at a cost basis that could make them highly competitive in price with other cars in the premium category. In the meantime, Volvos sold in the U.S. continue to be imported from Europe.

Read Full Article

Keywords: automotive industry, U.S. auto imports, China auto sector, supply chain management, logistics & supply chain

Could Volvo's Fortunes Revive Under Chinese Control?