Low-Cost Chinese Model Doesn't Sound Good to Volvo

For Volvo, getting a Chinese owner raised new opportunities, especially in China, the booming market that made companies across Europe inject millions in local operations. Besides plans to manufacture Volvo products domestically, voices familiar with the matter have also hinted that low-cost cars specifically aimed at the Chinese market are also possible, although not much was known about such a project.

Volvo finally decided to bring some clarification on the matter so, through the voice of CEO Stefan Jacoby, the Swedish manufacturer explained that it will never build a low-cost product for the Chinese market.

"We are a global premium seller and we design and build our products for a global customer base," he said in an interview for Salzburger Nachtrichten. "That of course does not rule out specific models for specific markets. Generally European customers want more compact cars while the Chinese and American customers want bigger models."

In the meantime however, Volvo is studying the possibility to bring vehicles manufactured in China on the American market, in a move supposed to help the company save some money from the exchange rates. Of course, Volvo is also pondering a new production facility in the United States, but such an option has only slight chances to turn into reality given the fact that Geely is mostly looking into ways to boost Chinese operations.

"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 earlier this month when talking about the company's future US plans.