Volvo plans to bring from China cars for the US market and build an American plant, trying to counter the effects of a strong Swedish krona.
“We need natural hedging in US dollars. That could be production or sourcing or exports out of China, ” said Stefan Jacoby, chief executive.
According to Sefan jacoby the strong krona represents a disadvantage for the Swedish carmaker which tries to fight its German premium carmakers rivals such as Mercedes, Audi and BMW. Volvo plans to build two car plants and an engine facility in China. The first one, located in Chengdu, the capital of Sichuan province, is set to be opened in 2013, followed by the second one situated in Daqing in the north-west of the country. The engine facility will be located in Zhangjiakou, near Beijing, and it will be opened after the two car plants.
Mr. Jacoby added that the company’s plan to import cars from Chin for the US market and increase local purchasing in the States might not be a long-term solution. He plans to turn the automaker around and make it compete more directly with its German rivals. But the first half results show how difficult this task is. After the carmaker suffered a 84% loss in operating profit to SKr239 million, it has also cut production at its Torslanda facility and laid off temporary employees.