Volvo Car Corp. has announced it has signed an $800 million loan agreement with the China Development Bank that will help it finance the development of new cars for the local market.
The first drawdown under the loan agreement will take place in 2013, with further drawdowns planned during 2014 and early 2015. The amortization structure and terms of this loan agreement are equal to the loan agreement of EUR 922 million that Volvo Car Group and China Development Bank signed in 2012.
“This agreement is a further proof of the good relationship between Volvo Car Group and China Development Bank,” says Hans Oscarsson, Chief Financial Officer at Volvo Car Group.
Volvo is banking on growth in China, the home of parent Zhejiang Geely Holding Group Co., to reach its goal of roughly doubling sales to 800,000 cars by 2020.
“Our offer is now very strong with a number of new products in the showrooms and we expect continued growth as more markets are launching the new cars and Drive-E powertrains. China in particular is performing outstanding and we expect a full year result well above our target”, says Alain Visser, Senior Vice President Marketing, Sales and Customer Service at Volvo Cars.
China once again became Volvo Car Group’s number one market in October with 5,086 retail sold cars, representing an increase of 50.1 %. The best-selling model was the Volvo XC60 with 2,321 sold cars. China also was the second biggest market for the V40 model, after the Netherlands.