Volvo said it plans to reduce its annual spending by $620 million by boosting production efficiency and cutting the number of white collar workers.

The Gothenburg, Sweden-based truckmaker said that it wants to reach the savings goal by the end of 2015 and that the cost-reduction strategy will lead the company to charges of around $750 million. The move, which was announced today, September 24th, is part of a broader plan which will cover the following three years and is aimed at boosting profitability.

Volvo’s operating profit during the second quarter fell 58% to around $600 million due to the economic slowdown in China and the downturn in Europe which kept companies away from vehicle purchases.

Earlier this month, Geely and Volvo opened a new research center in Gothenburg, with the immediate task of developing a new modular architecture and components for the next generation of C-segment cars for both automakers.

“This will ensure tailor-made solutions to multiple brands for various market segments. This joint R&D Centre with its combined strengths will enhance our competitiveness in technological leadership,” said Mats Fagerhag, CEO of the new R&D Centre.



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