Volvo considers North American production
By Poornima Gupta
DETROIT (Reuters) - Ford Motor Co’s (F.N: Quote, Profile, Research) Volvo is considering producing vehicles in North America because of the weak dollar, Fredrik Arp, chief executive of the Swedish brand, said on Monday.
Volvo, Ford’s Swedish luxury unit, is also planning to shrink its 350-strong dealer network in the United States in 2008 to align its distribution channel with lower sales volume, Arp said.
“The North American market continues to be difficult for Volvo because of the dollar decline,” Arp told Reuters in an interview on the sidelines of the North American International Auto Show.
Arp said one way to counter the falling value of the U.S. dollar was to produce vehicles locally.
“It’s an alternative,” Arp said. “We are into analytical phase now. We are studying (the option).”
Volvo could use Ford’s production facilities in North America, Arp said, adding that he expects the study to conclude in the second quarter.
Ford’s Swedish luxury unit, which currently has production facilities in Sweden, Belgium and China, has been badly hurt by the strong euro, strong crown and weak dollar, which makes exporting cars to the United States uncompetitive.
Volvo has been the most successful company among Ford’s stable of foreign brands, dubbed Premier Automotive Group. But its profitability has declined in recent years. Continued…
Tags: american international auto show, Auto, Auto Show, cars, Ford, ford motor, ford motor co, international auto show, national auto, north american international auto, reuters, sales volume, Volvo
