Response to Trump’s trade war with China: Volvo is shifting SUV production from China to Europe

07/19/2018

Response to Trump’s trade war with China Volvo is shifting SUV production from China to Europe

Volvo

Volvo XC 60: Models planned for the US run in the future from Europe in Europe – no longer in China

The Swedish-Chinese car manufacturer Volvo reacts quickly to the trade dispute between the USA and ChinaAccording to Volvo boss Hakan Samuelsson, Volvo’s SUV XC60 will no longer be produced in China for the US market, but in Europe. So Volvo wants Washington’s new Punitive duties on imports from China handle, Volvo explained.

The compact SUV XC60, the best-selling Volvo model, is currently being produced at two locations: The Swedish company Torslanda has been producing the latest generation of the XC60 for European customers for over a year now. So far, Volvo has been producing the SUVs for the Chinese and North American markets at the Chinese plant in Chengdu.

Now, the XC60 models for the US are also in Europe off the line, while in Chengdu the cars for China and other markets are produced. According to Samuelsson, the shift from China to Europe has already begun. How far that really helps, still has to show. Because US President Donald Trump is also concerned with the EU and threatened last week with tariffs on cars.

For US imports from China, however, the tariff barriers are currently particularly high: this month, the US imposed 25 percent tariffs on imports from China worth 34 billion dollars. These include Volvo’s XC60 – and the S90 sedan, which Volvo manufactures exclusively in China. Beijing has responded with punitive tariffs on US imports.

Just recently, Volvo opened its first US factory near Charleston, South Carolina. The mass production of the Volvo sedan S90 should start there in the coming month.

Volvo on record course despite international trade dispute

Volvo has invested $ 1.1 billion in the plant. Although it offers the automaker a little protection against increasing import duties. But Volvo remains dependent on imports in the US, its fastest growing market. In the first half of the year Volvo has increased its sales in the US by 40 percent. The number of imported XC60 models in the US increased by 64 percent to 14,790 cars, reports Reuters.

Actually, Samuelsson noted, he prefers a complete elimination of import duties. “The best thing for the auto industry in China, Europe and the US would be to have no customs barriers – and compete on equal terms,” Samuelsson told Bloomberg.

Currently, the opposite is the case: US President Donald Trump will receive EU Commission President Jean-Claude Juncker in Washington next week. It should go above all to tariffs. Juncker wants to reduce the tensions – at the same time, however, the EU is preparing for retaliation if the US impose higher tariffs on cars from the EU.

Meanwhile, the daughter of the Chinese Geely group is on course for the fifth record year in a row despite the international trade dispute. Accordingly, Volvo Cars is heading for a sales record in 2018 as well. In the second quarter, the operating profit increased by 29 percent to the equivalent of 407.1 million euros. Turnover increased by more than a quarter to 6.4 billion euros.

with material from Reuters

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