Volvo mulls third factory in Europe

Automotive Industry

Source: Automotive News Europe, 2021-11-14

Volvo Cars wants to build a third factory in Europe after 2025, Chief Financial Officer Bjorn Annwall said, in order to go beyond a target of selling 1.2m vehicles annually by that year, an increase of more than 80% compared with the 661,713 units sold in 2020.

The Gothenburg-based company, which became Sweden's second largest listing ever after its IPO in late October with a valuation of $18bn, currently has two factories in Europe -- one in Torslanda, Sweden, and the other in Ghent, Belgium.

"We need both our plants in Europe ... but we need more. That's why we want to build a third plant," Annwall told Automotive News Europe (ANE) sister publication Automobilwoche.

Annwall told the Swedish business newspaper Dagens Industri in July about Volvo's plan to add production capacity beyoud 2025, saying the plant would "probably be in Europe."

Where that plant will be located is not yet clear, he said.

Volvo Chief Technology Officer Henrik Green told ANE in July that the automaker can reach its 1.2m sales goal "if we bump up the maximum capacity in all the plants that we have."

"But moving forward beyond 2025 and going to even higher numbers, which we plan to do, we would need more capacity than we have today," Green told ANE.

A Volvo spokeswoman confirmed on 14 November that the automaker has capacity within its global network, which includes one factory in the United States and three in China, to reach 1.2m sales by 2025.

The automaker, which recently debuted on the public markets, is majority owned by China's Zhejiang Geely Holding Group. It currently sells about 700,000 cars annually.

CEO Hakan Samuelsson told ANE in a recent interview that Volvo would come close to surpassing its 2019 sales record of 705,452 vehicles this year, and that it was aiming for 800,000 sales in 2022 or 2023.

By 2025 Volvo wants full-electric cars to account for half of its global sales, which would be 600,000 units.

Volvo plans to be an electric-only brand by 2030.

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