Volvo AB Moves Production to Poland, Closes Sweden Plant image

Volvo AB plans to move its bus production in Poland and close the Swedish facility, as it expects a decrease in demand for buses in Europe.

The company said that if it carried out its plan to move European production of buses in Wroclaw, Poland and close the plant in Saffle, Sweden, it would take a charge of 100 million crowns ($15.14 million) in the fourth quarter.

“Demand for new buses in Europe has dropped steadily over the past few years, paralleled by considerable pressure on prices, particularly in the Nordic markets,” said Hakan Karlsson, the president of Volvo Bus Corporation. “The company assesses that volume growth in Europe will remain low in the coming years and that price pressure will continue.”

Therefore the company has decided that in June 2013 it will close the plant in Säffle, Sweden, which will affect 60 consultants and 330 permanent workers there. The plant in Poland is four times larger than the one in Säffle. Volvo officials said that by focusing the production of complete buses in a single facility, they will manage to reduce costs and therefore reverse the company’s negative profitability trend.