Volvo to invest $5.5bn in Sweden
Chinese-owned Volvo car corporation is committed to developing its next generation of cars in Sweden, with nearly half of its planned $11 billion in investments expected to wind up in the country, the company said today.
Bought by Geely from Ford Motor in 2010, Volvo aims to boost sales by 2020 to 800,000 vehicles from just over 400,000 currently, betting on rapid growth in demand in China.
Volvo said in a statement today it would make a multi-billion-dollar investment in Sweden to develop a new line of cars, including a four-cylinder, fuel-efficient, family vehicle.
"This is testament to our determination to strengthen the firm's position as a Swedish car brand with a unique attraction on a global market," said Hakan Samuelsson, Volvo's chief executive.
About a third of the investment in Sweden would be made to expand and upgrade Swedish production, it said.
It expects to launch the first car model based on the new architecture, the Volvo XC90, at the end of 2014.
The global downturn has meant it has not been plain sailing for Geely as it tries to turn the Volvo business around, the Swedish company having struggled to be consistently profitable over the last decade.
Volvo's sales fell 5.9 per cent in January through October and the company has had to cut production both in Sweden and in Belgium, where it also has a plant, to adjust to flagging demand.