June 6 (Bloomberg) -- Volvo Cars Chief Executive Officer Hakan Samuelsson said the Swedish luxury carmaker may eventually use spare capacity in China for exports.
“First things first and that is to open up the factory, secure quality,” Samuelsson said yesterday in an interview in Chengdu, south central China, where Volvo opened its first Chinese plant. “But this could be something we could also utilize for exports.”
China-made vehicles may be shipped to Asia and other regions, he said. Still, the priority is on China, where the company has become a latecomer after Chinese tycoon Li Shufu bought the Swedish brand three years ago only to find that the Chinese government subjected the Swedish brand to the same regulatory approval procedures as all foreign automakers.
“It’s the biggest market in the world -- 15 million cars sold per year -- and taking a reasonable slice of that would be impossible without industrial presence,” Samuelsson said in a separate interview. “That’s why this factory is important.”
Volvo Cars, owned by Li’s Zhejiang Geely Holding Group Co., expects the Chengdu factory to have an annual capacity to make 120,000 vehicles. It plans to open another plant in the northern city of Daqing late next year to increase Volvo’s combined China capacity to about 200,000 vehicles a year, Samuelsson said.
China is a cornerstone to Volvo’s strategy as the company projects selling 200,000 vehicles in the country in five to six years’ time, Samuelsson said. Globally, Volvo has set a goal to double deliveries to 800,000 units by the end of the decade.
Li, 49, yesterday likened Volvo to a tiger that needs to recover its strength.
“Once this tiger returns to the mountains and carves out its own territory, it will enjoy the market share that it is due,” Li said.
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