Volvo said its sales in 2012 dropped 6.1%, buy reporting double digit losses in Sweden and China.
For Volvo, owned by Chinese group Geely, the Chinese market is of utmost importance for its growth hopes. The automaker saw its overseas sales drop to 421,951 vehicles in 2012 from 449,255 vehicles in 2011.
“Competition in the car industry will most likely continue to be as fierce as in 2012 as manufacturers will seek to capture volumes and market shares in a market where the economic situation will remain unstable,” the group said in a statement.
Although several markets reported improvements last year, especially the overseas and the emerging ones, the economic situation in the biggest regions and markets affected the demand. Volvo plans to invest $11 billion to reach total annual sales of 800,000 vehicles by 2020 and increase sales in China to 200,000 vehicles from 41,000 in 2012, which represented a decrease of 10.9% compared with 2011. Volvo’s only market to report a sale increase was the US, up 1.2%.
Volvo said it plans to begin production at its new plant in Chengdu, China, in the second half of 2013. Last year the Swedish automaker fired its German chief executive and replaced him with Hakan Samuelsson, the Swedish truck sector veteran, in an attempt to accomplish its China growth plans.