It’s hoped the move will increase demand for Chinese-made Volvos by also developing and building more luxurious and large vehicles there. Another option being considered is building a new Volvo assembly plant in the US, according to the WSJ. Ford, who sold Volvo to Geely, also made the Swedish cars in China, but they were never sold in the States.
On the sidelines of the recent Detroit Auto Show, Jacoby has already stated that new manufacturing facilities will be built in multiple locations around the world, but no decision was reached on whether to export vehicles or not.
The instability in the EUR/USD exchange rate has especially eroded Volvo’s profit margins of models shipped to the US and produced in Sweden and Belgium. "The major challenge here in the US is that we're too dependent on euro-US dollar exchange rates. China offers an opportunity in that respect. It doesn't get rid of but at least allows us to reduce currency risk exposure," Jacoby said, highlighting the relative stability of the Chinese yuan against the dollar.
According to just-auto, despite the fact that a number of other consumer good made in China are sold in America, that isn’t the case with premium cars.
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