Volvo will be exporting the Chinese-built long-wheelbase version of its S60, the Volvo S60L, to the United States as part of a larger plan to turn the Middle Kingdom into an export hub.
Reuters reported that apart from the S60L, Volvo will also be exporting the XC90 (it is unclear whether this refers to the current model or the next generation unveiling later this year) to Russia, as well as other markets such as South East Asia. These plans are slated to be put in motion as early as late next year, and Volvo will eventually export as many as 10,000 S60Ls and a few thousand XC90s out of China each year.
Despite quality concerns over Chinese-made products, Volvo reportedly wanted to safeguard itself from any currency risks, with an executive saying, “The dollar and the yuan has the best relationship, a more stable relationship than the euro and the dollar.”
Volvo will be producing cars in China from two plants. One in Chengdu has been churning out S60Ls since late last year, while the other in Daqing is ramping up XC90 production. The two plants will be able to achieve full capacity of about 250,000 units a year by 2018.
The company is also on track to beat its own sales target for China this year by at least 13% as it opens more showrooms in the world’s biggest car market, with sales likely to soar by almost 50% from the year before to more than 90,000 cars. This is well above the 80,000-unit target and will make China Volvo’s biggest market, ahead of the United States.
But certain quarters within Volvo are exercising caution, with the company’s global head of media relations David Ibison saying that despite the phenomenal growth in China (35% increase in sales year-on-year), selling 90,000 cars in 2014 could be “a step too far”. He added that the company is focusing to make sure “our growth is profitable and sustainable.”
Volvo has been owned by Chinese manufacturer Geely since 2010. Last year, the company sold 427,840 vehicles globally, an increase of 1.4% from the year before.