European production safe, says Volvo’s CEO image

Volvo Car Corp. CEO Hakan Samuelsson says the company’s car production footprint in Europe is safe despite the region’s chronic overcapacity.

Through October, Volvo’s European sales were down 4 % to 181,434, but it’s overall 10-month global volume was flat at 346,844 because of strong demand in China, where the automaker started series production of the Volvo S60L in Chengdu this week.

Volvo’s European factories are in Gothenburg, Sweden, and Ghent, Belgium, two countries where plants already have been forced to close because of the region’s sales slump. European cars sales are expected to decline for a sixth straight year in 2013, with registrations on track to fall to about 12 million units from 16 million in 2007.

“We are rather well positioned where we have the two factories in Europe and I don’t think we will be influenced by this [overcapacity problem]. We are flexible enough to cope with the slightly lower volumes right now,” said Samuelsson.

One reason that Samuelsson is confident about Volvo’s European plant capacity is because he believes the region’s sales slump could be coming to an end. “I think Europe has seen a leveling out so hopefully we will see slightly better figures in ’14 and ’15,” he said.

Volvo is getting a big boost from the V40, which debuted in late 2012, and V40 CC, with went on sale this year. Through October, the automaker has sold a combined 79,555 units of the cars globally. The majority of the volume has been in Europe.

Volvo closed a factory in Uddevalla, Sweden, in June while General Motors’ Opel unit shut down its plant in Antwerp, Belgium, in late 2010. Ford plans to stop production at its facility in Genk, Belgium, next year. By the end of 2014, Ford, Opel, PSA/Peugeot-Citroen and Volvo will have shut a combined five vehicle manufacturing plants in Western Europe.

Via Automotive News Europe