Volvo, which Geely bought from US automaker Ford Motor Co in 2010, highlighted the tough conditions it faces in its key market of Europe, as chief executive Hakan Samuelsson appeared to cast doubt on the timing of its 2020 sales goal.
"There is no reason to change that (the 2020 goal). But in today's situation, one cannot sit and discuss whether we will meet that in 2021 or 2019, but the goal remains, we need to be bigger and we will be bigger," he said on December 03.
The maker of premium cars said it would introduce new, simpler production methods, and only one engine size. The plans would mark a final technological break with Ford, cut production costs through economies of scale and greater efficiency, and produce more attractive cars to lure buyers even in an economic downturn, it said.
"About half of the approximately $11 billion investments covering the years 2011 to 2015 will be spent in Sweden in the form of infrastructure for the new vehicle architecture and engine family," said Samuelsson, who was appointed in September, when his predecessor as fired for weak Chinese sales.
The sum of $11 billion is what Volvo has said it will invest as it aims to double total sales by 2020 to 800,000 vehicles. Samuelsson told reporters some of the investments were being funded by cash flow from sales and some from borrowings, without giving a precise breakdown.
NO POSITIVE SIGNALS
"There are no direct positive signals in the European market," Samuelsson told reporters when asked about 2013. Western Europe's car market shrank by 7.3 percent in the first ten months of the year, data from industry group ACEA showed.
Samuelsson said it would be tough to reach break-even at the operating level this year after it posted a first-half operating profit of 239 million crowns ($35.89 million).
At the net level, it made a first-half loss of 254 million crowns. Samuelsson said the North American market was "coming back" and that China was still growing, albeit at a slower pace.