Volvo Expands Business in China

By: Glady Reign

The Chinese car market has seen a remarkable increase in sales in recent memory. The second largest car market in the world is continually attracting the attention of car manufacturers. It is expected that 8.5 million vehicles will be sold in China this year. Volvo Cars is one of the car manufacturers seizing the opportunity by expending their presence in China.

The Swedish car manufacturer announced that they have sold 60.5 percent more vehicles in China for the first quarter of the year as compared to the first three months of 2006. The company further announced that they are expecting a 100 percent sales increase this year.

To facilitate this increase in Volvo sales in the country, the existing 50 Volvo dealerships in the country has already been upgraded to accommodate more vehicles in their showrooms. In the past 12 months, Volvo announced that 20 new or upgraded dealerships have opened their doors for Chinese car buyers.

This business expansion in China has apparently pleased the country's president as Chinese President Hu Jintao visited Volvo's assembly facilities in Gothenburg. The visit is in connection with the president's first state visit in Sweden.

Last year, Volvo Cars sold more than 7,000 vehicles in China. "We almost doubled our sales volume in 2006, and our aim is to do the same again in 2007," says Fredrik Arp, the President and Chief Executive Officer of the Ford Motor Company-owned car manufacturer. "To us, China is the most exciting car market in the world. It is a vital part of our growth plans, and we believe that in the next 5 to 10 years China will move up to second place in Volvo Cars' sales chart," he added.

In connection with the Chinese President's visit, Arp has this to say: "It's a great honor to host President Hu Jintao during his visit to Sweden and Volvo. This will give us an excellent opportunity to inform him about our cars and our plans on how to strengthen our presence in the Chinese market."

In terms of production in China, Volvo Cars has already started the production of the best-selling S40 in the country. In the middle of July last year, the first S40 rolled out of the Changan Ford Mazda assembly facility in Chongqing. By the end of last year, about 4,000 Volvo S40s have already been built in China. This year, the company aims to produce 8,000 units of -equipped S40s which are going to be built and sold in China.

"The launch of the S40 produced in China has been successful, both from an industrial point of view as well as from a commercial angle. After working with Changan Ford Mazda for almost two years, we have ensured that their factory, through cooperation with our own experts, meets our high demands regarding Volvo quality. A Volvo must be a Volvo car in all aspects, no matter where it is produced," says the Volvo Cars CEO.

Aside from the S40, Volvo also offers the flagship S80 and the award-winning XC90 in the Chinese auto market. These two auto models have promoted the brand well in the country. Last year, the two auto models comprised almost half of the total vehicle sale of the company in China. The redesigned S80 is expected to generate more interest in the brand among Chinese car buyers. The polished XC90 meanwhile was unveiled at the Shanghai Motor Show earlier this year.

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