How Will Volvo’s Move To Chinese Production Affect The Brand?

In a surprising move, Volvo has announced a massive expansion of Chinese production, shifting focus away from Europe and making China its global manufacturing and export hub.

More specifically, it has been announced that production of the S90 premium sedan will be moved from Sweden to the company’s plant in Daqing, China and then exported globally.

Additionally, a Volvo facility in Chengdu will build existing and future 60-series models the alongside Swedish plant based in Gothenburg. Furthermore, future 40-series small cars will be constructed at a factory in Luqiao, 350 km south of Shanghai as well as at Volvo’s existing Belgium plant.

The company says its “expanded production capacity in China forms an integral part of its broader global industrial footprint”, spreading the load of production across the world. A factory in South Carolina is also being constructed.

Volvo’s increased focus on the Chinese market comes as part of the marque’s $11 billion revival currently being led by Chinese owner, Zhejian Geely Holding. Although Volvo has yet to reveal just how many units of its various models will be produced annually in China, it refused to reveal to Autonews if production of the S90’s sibling, the V90, could also be shifted to China in the future.

Beyond making its own models in China, Volvo’s upcoming factory in Luqiao will be tasked with building the various upcoming vehicles from Geely’s new car brand, Lynk & Co.

In a statement, president and chief executive of Volvo, Håkan Samuelsson, said “With three plants – and the designation of one car line for each plant – Volvo creates an efficient production structure ensuring future capacity for growth.”

While Volvo isn’t the first European automaker to have plants in China, its dramatic and ambitious focus on the market does come as a shock.

Will Chinese-production of its models tarnish the brand’s image? Or will it help it achieve record sales and deliveries? Let us know your thoughts in the comments.

PHOTO GALLERY

  • Captain Jack

    Sounds like the old bait and switch. “Sure, we’ll produce the cars in Sweden.” Right; with a Chinese owner desperate to export cars built in China. The S90 sounds like a good car, but do you want a Chinese built car? Same for the Buick CUV. There are lots of other good choices out there that are not built in China…

    • Status

      I don’t think a Chinese built Volvo or Buick built could be worse than an American built Dodge Dart.

  • TheBelltower

    It is going to kill the brand everywhere except for China.

    • Fokker

      My thoughts exactly. Car is most likely your second biggest investment in life (after house) and you don’t want to take a gamble on it, its not a smartphone, or any other stuff you buy on AliExpress. You want quality and people don’t associate it with chinese products (deservingly or not). People often ask me for advice on cars and usually when I suggest them a new Volvo they say: “They look nice, but they are owned by chinese now, so I don’t know if they are any good”. Especially that Volvo comes with a premium price tag.

  • Kash

    Most people probably won’t notice unless they actually look at the cute little stickers on the car. Most people also won’t care unless they happen to live in the European towns where Volvo is moving these factories from.

    • Mark S

      People notice and care where their car comes from now days Kash. Exp at the S90’s price point.

      • Kash

        I beg to differ. At this price point it’s more about the badge, at the price of a Fusion or if it’s an American buying an American car like the Malibu or Fusion wanna make sure their car is built in America, especially if they’re buying it in the midst of this election.

        I’ve never had a client ask me where their car was built and I’ve helped people buy close to 1,000 cars at this point, and I’m not talking about Malibus and Fusions, I’m talking about the S600 Maybachs, Huracans, LaFerraris, GLE’s, X5’s, Model X’s, etc.

        I really don’t think most people buying this car is going to notice or care unless we start talking about a Polestar version geared at the S6/E43’s buyers and such.

        • Mark S

          They don’t have to ask you Kash because they already know where the car comes from! Most People care, you will see.

    • TheHake

      I will care. I will NOT buy a car made in China, ESPECIALLY at the price of an S90.

  • Mark S

    Volvo’s Bait and Switch. I will never buy a Chinese Made Car from any manufacturer.

    • R Z

      But you use iphone, right?

      • Mark S

        Yes we all know where I-Phones come from so cut it on the overused blather. I can hide my phone in my pocket with out having to drive around in it like a Communist Billboard. People will not bite.

        • Status

          The shame of your hypocrisy will still follow you.

      • TheHake

        Do they make phones anywhere else?

        • RS6 Performance Wagon Lover

          Huawei is made in Taiwan.

          • TheHake

      • Auf Wiedersehen

        If they made a phone in ANY other country, I’d buy THAT phone. Cars come from a plethora of other reputable countries and I buy THOSE cars. I might not have ever bought a Volvo, but rest assured I will never now. I have no choice on my phone.

  • volvoswede

    I am from Gothenburg and we dont mind this shift at all. The fact is Volvo has never been healthier then today and both European factories in Gothenburg and Ghent are expanding production but not fast enough to keep up with demand and that’s why new factories are popping up in the US and China. China is the worlds largest car market and is stands to reason that the company needs a manufacturing base there too.

    • BGM

      Nonsense. Volvo is a tiny company compared to others and can easily – very easily – expand production in Sweden. Maybe they can open a plant in Malmo, putting to work some of those hundreds of thousands of semi illiterate Muslims that have turned that city into the world rape capital, there’s an idea!

      And they’re not putting a manufacturing plant in China. The article seems to suggest that aside from the entire S90 line Volvo is shifting most manufacturing there. Less work for Europeans, more work for cheaper Chinese labor, more money in the pockets of the elites.

      • velsatissweden

        Every thing you written is so true. Not least the part about Malmö!

  • Knotmyrealname

    Of course people will care. Poor Volvo.
    China the technological and financial black hole.

  • ediotsavant

    Buyers don’t care where they are built.

    • Matt

      Have you asked them?

  • Giorgos Papaspyros

    ” Volvo isn’t the first European automaker to have plants in China”

    The other European automakers with plants in China, assemble cars there for local demand only.
    The cars destined for Europe are mostly manufactured in European plants.

    Now Volvo plans to sell in Europe chinese-made Volvo cars.
    That’s the difference.

  • Nick

    Volvo want to increase sales by 60% from 500k a year to 800k a year. The Chinese market is where all their growth will come from, so it makes financial sense to supply their main market from local production. Big SUV markets like the US will be supplied from their new US plant. Station wagons will be supplied from their European plants because they don’t sell many in other markets. If you want to support US companies, buy American instead. With brands like Buick or Lincoln selling more cars in China don’t be surprised if they’ll be imported from China as well. I’m just glad that Volvo is thriving under their new ownership, just like JLR after Tata took over.

    • Burnermovement

      The Buick Envision is already being imported to the USA from China. That being said, while I wouldn’t buy a Chinese made car ATM, I’ll never buy an American made car ever again because from my experience, they’re not reliable.

      I say ATM, because I said 10 years ago that I wouldn’t consider Korean, but look at the strides they’ve made in the past decade.

  • Anthony McGowan

    It was only a matter of time. Building volume models in Western Europe is becoming an increasingly expensive business, and apparently this is outweighing the risk of brand damage. The vast majority of consumers genuinely don’t care where their car is made, so long as perceived quality/reliability, safety and (for some) design levels are acceptable to them. I don’t see this harming Volvo at all as they will continue to heavily market their Swedish design & engineering aspects. However, if you’re one of their Swedish or Belgian assembly workers, perhaps it’s time to consider alternative career options…

  • Big Black Duck

    considering this will be made in China..the main concern is the quality and safety…if they pass with flying colours….then it may change the world’s preconceived notions..if not it will only reinforce them… better make this right Volvo..or you are f*cked 4 Life..

  • DGC

    We looked at the Volvo V60… Liked it a lot. Ended up buying the Audi A4 Allroad. We made our decision not to buy the Volvo because of the strong Chinese connection. We have enough stuff made in China, we can have a choice where our car comes from….

  • Trackhacker

    I’m a Volvo fanboy….but this is a bit disappointing even for me.

  • nauticalone

    As a consumer I’m concerned yes! I bought my first Volvo last year (an XC60) and have been waiting on the new one to compare to other vehicles. I find I’m now more inclined towards the new Jaguar F-Pace or Porsche Macan (as I want a mid size quality 5 seater) and as Chinese made cars are not known as Premium Quality Vehicles like say European ones! A car is a big investment…it’s not a phone!

  • SgtBeavis

    Folks will always say that it’s the doom of a company. Then they go and buy the product. They said this about the Japanese and then the Koreans. At one point both had really bad cars but they kept working at it and got better. Now both are powerhouses in car manufacturing.

    The same can be said about the Chinese and Volvo with one notable exception. Volvo is an existing, semi-premium, brand that is trying to push themselves up market. If the Chinese manufacturing is screwed up, it will hurt the brand in the short term. But the Chinese aren’t exactly new to car manufacturing. The only difference here is that they’ll finally start exporting to the US.

    Many here will puff up their chest and say that they won’t buy Chinese cars. The same thing was said about Japanese and Korean cars. Sure a few will follow through but most people really don’t give a damn.

  • KF

    If this succeeds, your next BMW or Mercedes will be from Shanghai…money talks.

  • Radek

    Recently I bought v40 (Ocean Race 2.0 152 HP 🙂 ), which I love, keeping in mind that it was built in Europe. I wouldn’t have bought it if I had known it had been built in China (then some Lexus or Merc)!

  • Murat Bayer

    I have been using Volvo since 2001. It was one of the strong car (S40) I don’t mean as a engine. You feel the safety. After that I use some other brands. But again I bought another s40 in 2009. Around 2011 the production is stopped, which is one of the best seller of Volvo. And than I bought S60 ecodrive automatic transmission. It was Volvo but not the Volvo that I have been used to. S60 is a failure car. When I wanted to park the S60, I bring shift to P, but the car says you need to bring the shift to P. I have some other problems, which Volvocars Company doesn’t care. Due to some other problems I have to sell S60; we buy v40 cross-country….
    Let’s summarize the story. You may ask why do I still use Volvo? Because I am in love of this brand, which is no more good when you compare the past. I guess Volvo has a problem with Istanbul (turkey) traffic jams therefore they don’t bring D2 l; 1,6 Liter Diesel engine, I guess it is because of problem that they have lived. No more quality… and when the production moved to China it is dead brand for me although I like niew xc90 ;S90…. I have sent some email Volvo Ceo or other people but they don’t care… Volvo has also no plans for their future models I mean when s60 get face-lift when a new s60 is coming… unlike bmw, Mercedes or audi that’s reason why volvo can’t sell more than them.

  • Murat Bayer

    Actually Volvo is no more Volvo

  • SonOfaBeech

    daimler is next

  • Chuck58

    I went to drive the Volvo S60 today. Nice car. When I looked at the window sticker it was a shock to see that the car is rolling off a Chinese auto plant with very little components from Sweden. I thouhght same thing,
    China ? I drove an Alfa Rameo, Guilia, assembled in Casino italy with a Greman engine. Is is a perception thing? Of course. In the end we want a reliable vehicle. I won’t buy a Hyundai because I don not think korea is a hub of automotive prowess. I’ll be looking at BMW and Mercedes Benz next.

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