Geely acquired Volvo Cars as early as 2010. Volvo’s current production capacity in China also provides a global export business in addition to meeting domestic market demand. However, with the change sours of the international business environment, so will this situation. Volvo will no longer export Chinese-made cars to the U.S. and European markets, given the U.S.-China trade dispute, said Hanken Samuelson, Volvo’s chief executive, according tomedia reports.
He also revealed that its domestic models in China are only sold in the Chinese market (including the Volvo S90, XC60, S60). In addition, Volvo and Geely’s merger plans will be temporarily suspended as Geely will be listed on the A-share market, tentatively resuming negotiations in the third quarter of this year.
However, Volvo’s factories outside China are also facing considerable challenges, particularly in the US, due to the spread of overseas outbreaks.
In the case of the plant in Ridgeville, South Carolina, the plant has not yet started construction because of the outbreak, which has hampered local logistics traffic. Volvo’s sales have also fallen significantly this year as the global car market has been hit by a cold downturn.
In its first-half results, data showed a first-half operating loss of 989 million Swedish kronor (about 900 million yuan), compared with a profit of 2.67 billion yuan a year earlier.
In terms of sales, Volvo’s global market has fallen. In the first half of the year, 269,962 vehicles were sold, down about 21% from 340,826 in the same period last year.
However, Volvo Cars chief executive Hokan Samuelsson remains optimistic that the company’s first-half results decline is temporary and that a strong recovery is expected in the second half.