Volvo will invest around $5 billion to upgrade production in Sweden in order to boost sales and cut costs.
Volvo, owned by Chinese automaker Geely, plans to revive its sales in its key market, Europe, as the company fears it will miss its 2020 sales target. Volvo announced it will focus on new, simpler production methods and will only manufacture one engine size. This means the automaker will cut production costs, manufacture more attractive vehicles to attract customers even in these difficult times, but most importantly it will mean a technological break with Ford.
“There is no reason to change that (the 2020 goal). But in today’s situation, one cannot sit and discuss whether we will meet that in 2021 or 2019, but the goal remains, we need to be bigger and we will be bigger,” said chief executive Hakan Samuelss.
Volvo plans to invest almost $11 billion (6 billion pounds) from 2011 to 2015 to boost its sales to 800,000 units by 2020 and cut production costs, and almost half of this sum will be spent in Sweden to upgrade the infrastructure of its engine family and the new vehicle architecture. The first model based on the new architecture will be the next-generation XC90 crossover, which will be launched by the end of 2014.