Chinese-built Volvos ‘not in our plans’

VOLVO will continue to source cars and SUVs for Australia only from Sweden and Belgium in the foreseeable future, not China, despite serious supply issues.

Waiting times have stretched to more than six months for popular models such as the XC60, which mean Chinese-owned Volvo will fall short of achieving its goal of 7000 sales in Australia this year by up to 1000 units.

Several Volvo models are now manufactured in China but are only meant for the Chinese domestic market.

The president of Volvo Car Corporation’s overseas operations Wim Maes told Australian journalists in Sweden that management understands the distinct brand and marketing advantages of having its cars made in Europe.

“(Sourcing cars from China) is not the plan,” he said.

Left: Volvo Car Corporation president of overseas operations Wim Maes. Below: Volvo Cars CEO Stefan Jacoby.



“We do not need to supply cars to Australia from outside of Europe. That is an asset. We have our plants in Gent in Belgium and Torslanda in Sweden, and they will continue to run at full capacity.

“We can increase still. Now we will soon run well over 120,000 XC60s next year, which is at full capacity. So what I can promise next year is that you will not have the same waiting times for XC60 that you have today in Australia.”

And there will be no model or even technology sharing with the company’s Chinese parent Geely.

Volvo Cars CEO Stefan Jacoby said the high inherent cost of most of Volvo’s safety and driveability systems would make Geely’s extremely price-sensitive models unaffordable.

He said Geely is helping Volvo mainly with distribution and forming supplier associations within China.

“(Volvo’s) safety technology is expensive,” said Mr Jacoby.

“Geely is building cars for the entry segment in China. The possibilities for collaboration are truly limited.

“The way Volvo is set up is that we are not within an industrial holding like other companies like, for example, the Volkswagen Group.

“We have determined a couple of selected projects that we are doing together with Geely. It is obvious Geely is helping establish us in China, where we do not need to have a ‘Chinese Wall’ between Volvo and Geely, and they are helping us select suppliers as well.

“But from a technology point of view I think there is still a long way to go before Geely really have a need for our technology.

“It’s not that they don’t have this technology, but in their segments they do not have a need to (offer it) … it’s just not in the attributes of their cars.

“Volvo Cars remains a Swedish company, remaining a European company. In the first year all these concerns have disappeared.

“I remember back in March 2010 when the (Chinese stockholder) deal was first announced the whole world thought it was the beginning of the end of Volvo Car. I think we have proven things have turned out differently.

“The new owner truly understands what he has bought – a Swedish heritage company with a lot of solid foundation. He has bought the image of the company and he is very aware of it.

“Volvo will remain Volvo and Geely will remain Geely.”