Volvo Car Corp’s newest, fanciest car has a built-in refrigeration compartment, handmade crystal Orrefors glassware and the hopes of China’s premium auto-manufacturing industry riding on it.
Zhejiang Geely Holding Group Co (浙江吉利), Volvo Cars’ Chinese owner, yesterday unveiled upgraded versions of its S90 sedan, including the top-of-the range S90 Excellence, in Shanghai.
The executive vehicles are to be made in Daqing, China’s oil capital, and represent the latest product of a reinvigorated research and development program that has bolstered profit and helped drive record sales for the Swedish icon.
Photo: Reuters
Eventually, production of the premium cars will move from Europe to China, where Geely is building a third factory in Luqiao to make both Volvos and mid-tier Lynk & Co brand cars, the company said in a statement.
The changes are part of billionaire Li Shufu’s (李書福) plan to make China a global manufacturing and export hub for its new range of cars.
“China will play an increasingly important part in our global manufacturing ambitions,” Volvo CEO Hakan Samuelsson said in the statement.
“Our factories here will deliver world-class products for export across the globe in coming years, contributing to our objective of selling up to 800,000 cars a year by 2020,” he said.
One-third of Volvo’s global production will be out of China by 2020, Samuelsson said at the event to unveil the new model.
Geely bought Volvo in 2010 for US$1.5 billion, about one-third of the price Ford Motor Co paid a decade earlier. Under Ford’s control, sales peaked in 2000 and started to fall from 2006. Volvo, known for safety after inventing the three-point seatbelt, saw a US$1.8 billion loss the year Li took it over.
The 89-year-old automaker returned to profitability in 2013, the year after Samuelsson was appointed CEO. Last year, it became the first Western automaker to export a premium Chinese-made car to the US, with the S60 Inscription.
Volvo is poised for another record year of sales and operating profit is to “improve substantially” this year, Samuelsson, 65, said in a statement on Thursday last week.
The new S90 is to go into production this month, with the S90 Excellence following next year.
Both are to be on display at the Guangzhou International Motor Show later this month.
“Li Shufu managed to get Volvo back from the brink,” said Jochen Siebert, Singapore-based managing director of JSC Automotive Consulting.
“Geely has already gained much from the acquisition by getting world-class people on board and much more by getting technology for the next generation of cars,” Siebert said.
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