Volvo Car Group plans to export a Chinese-made midsize sedan this year to the US, and is starting to weigh the possibility of building a vehicle factory in the US, people familiar with the Chinese-owned automaker’s plans said.
Both moves would be significant for the auto industry and Volvo’s parent, Zhejiang Geely Holding Group (浙江吉利控股集團). So far, global automakers have chosen not to ship vehicles made in China to the US market in any significant numbers, and efforts by Chinese automakers to export vehicles to the US have foundered.
Volvo is also behind rivals BMW and Mercedes in establishing production in the US, which insulates the German brands from currency fluctuations.
Volvo might also export a large “strategic, flagship” sedan based on a newly developed underpinning technology, said the executives, who work for Zhejiang Geely. That car would be shipped out of China in addition to the Volvo S60L, a long-wheelbase version of the S60 sedan Volvo began producing in the southwestern Chinese city of Chengdu more than a year ago.
The moves are aimed at reviving Volvo’s momentum in the US market, where volume last year fell 8 percent from 2013 to 56,371 vehicles. The US market, which has long been Volvo’s largest market, was replaced by China last year. China bought 81,221 Volvos last year, a 33 percent rise from 2013.
More broadly, the moves are part of Geely’s turnaround strategy for Volvo, which has struggled to go beyond being a brand with an annual volume of less than 500,000 vehicles. Thanks to its focus on China, where the brand expanded its distribution network and product portfolio, Volvo sales volume is on the rise. It sold a total of 465,866 vehicles globally last year, up 9 percent from 2013.
“The S60L offers class-leading rear space, something that has been consistently demanded by US customers. It will be made at Volvo’s plant in Chengdu, China, and will be on show for the first time at this year’s North American International Auto Show in Detroit,” Gothenburg, Sweden-based Volvo spokesman David Ibison said. “The S60L forms just one part of our US revival plan.”
Ibison said Volvo plans to launch seven new products by 2018 and increase US sales to around 100,000 cars per year in the medium term. He declined to elaborate.
Exporting Chinese-produced mainstream passenger cars to the US and other advanced auto markets has been a long-standing goal of China’s indigenous automakers — an objective that has largely eluded the industry.
“It would be a big breakthrough” not just for Geely, but for China’s industry, said James Chao (趙英智), Asia-Pacific director of consulting and research firm IHS Automotive.
“Volvo is not an indigenous Chinese brand but it is wholly Chinese-owned. Perhaps this is the model or strategy that finally works for Chinese companies trying to enter the US market and other markets.”
Chao added that Volvo’s owner, Geely, could follow Volvo into the US market with its own products, perhaps leveraging Volvo’s manufacturing and parts supply chains.
Geely’s purchase of Volvo from Ford Motor Co five years ago surprised many in the auto industry, who doubted that a relative newcomer could turn around the nearly 90-year-old Swedish business while protecting its famous brand.
The S60L was developed originally as a China-specific model to cater to wealthy Chinese consumers who prefer cars with bigger, comfortable rear seats because many of these owners have chauffeurs. Volvo expects to ship roughly 1,500 made-in-China S60L cars to the US this year, compared with the car’s projected volume in China this year of 26,000.
The additional car Volvo plans to export to the US, those executives said, is a flagship large sedan that might be called the S90 which uses Volvo’s new vehicle underpinning technology called “scalable platform architecture” or SPA. The S90 will be a second vehicle based on that new architecture, following the redesigned XC90 sport utility vehicle based on the same technology.
Volvo announced in late 2013 that it would produce “a large premium sedan” based on SPA at a new plant in the northeastern Chinese city of Daqing. At Daqing, Volvo began producing in September last year the XC Classic, the previous generation of the redesigned XC90.
BUSINESS UPDATE: The iPhone assembler said operations outlook is expected to show quarter-on-quarter and year-on-year growth for the second quarter Hon Hai Precision Industry Co (鴻海精密) yesterday reported strong growth in sales last month, potentially raising expectations for iPhone sales while artificial intelligence (AI)-related business booms. The company, which assembles the majority of Apple Inc’s smartphones, reported a 19.03 percent rise in monthly sales to NT$510.9 billion (US$15.78 billion), from NT$429.22 billion in the same period last year. On a monthly basis, sales rose 14.16 percent, it said. The company in a statement said that last month’s revenue was a record-breaking April performance. Hon Hai, known also as Foxconn Technology Group (富士康科技集團), assembles most iPhones, but the company is diversifying its business to
Apple Inc has been developing a homegrown chip to run artificial intelligence (AI) tools in data centers, although it is unclear if the semiconductor would ever be deployed, the Wall Street Journal reported on Monday. The effort would build on Apple’s previous efforts to make in-house chips, which run in its iPhones, Macs and other devices, according to the Journal, which cited unidentified people familiar with the matter. The server project is code-named ACDC (Apple Chips in Data Center) within the company, aiming to utilize Apple’s expertise in chip design for the company’s server infrastructure, the newspaper said. While this initiative has been
GlobalWafers Co (環球晶圓), the world’s No. 3 silicon wafer supplier, yesterday said that revenue would rise moderately in the second half of this year, driven primarily by robust demand for advanced wafers used in high-bandwidth memory (HBM) chips, a key component of artificial intelligence (AI) technology. “The first quarter is the lowest point of this cycle. The second half will be better than the first for the whole semiconductor industry and for GlobalWafers,” chairwoman Doris Hsu (徐秀蘭) said during an online investors’ conference. “HBM would definitely be the key growth driver in the second half,” Hsu said. “That is our big hope
The consumer price index (CPI) last month eased to 1.95 percent, below the central bank’s 2 percent target, as food and entertainment cost increases decelerated, helped by stable egg prices, the Directorate-General of Budget, Accounting and Statistics (DGBAS) said yesterday. The slowdown bucked predictions by policymakers and academics that inflationary pressures would build up following double-digit electricity rate hikes on April 1. “The latest CPI data came after the cost of eating out and rent grew moderately amid mixed international raw material prices,” DGBAS official Tsao Chih-hung (曹志弘) told a news conference in Taipei. The central bank in March raised interest rates by