Volvo Focused on Partnership for Parts and Vehicle Systems image

Volvo announced it looks for partnerships with other automakers on vehicle systems and parts, as it tries to reduce development costs and become a tougher competitor in the premium small-car market.

Volvo Car Corp.’s research and development chief Peter Mertens said that the company is focused on finding a partner willing to cooperate on parts for the segment which includes the Volvo V40. Volvo will not team up with its partner Zhejiang Geely Holding Group, continuing to develop separate vehicle lines, but the two companies will joins forces to find a third party for collaboration.

“We are also looking for some alliances in terms of using components and systems broadly with other partners, and the most logical thing is obviously to use these kinds of economies of scale and cooperation inside of the Geely group,” Mr. Mertens said.

Volvo, worried about the dramatic situation in Europe and the dropping growth in China and North America, tries to cut one billion Swedish kronor ($158 million) in costs in order to break even by 2014. Today, the company said that it expects small sales gains in 2013, hoping that China and the US will manage to make up for the loss in Sweden and the rest of Europe.