Volvo seeks production partner in North America

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Artist's rendition of the Volvo logo.

Volvo may be entering into a partnership with Fiat SpA sometime soon. (Photo Credit: Public Domain/Hautala/Wikipedia)

Volvo, the Gothenburg, Sweden-based automaker owned by Chinese manufacturer Zhejiang Geely Holding Group Co., is reeling from less-than-promising auto sales numbers in North America. Volvo CEO Stefan Jacoby has sounded the partnership call. Before an audience at the Automotive News Europe World Congress in Mexico, Jacoby noted Volvo prefers to use a pre-existing North American production plant.

A solution in five to six years

According to Jacoby, Volvo wants to solve its North American problem rather quickly.

“In the medium term, five to six years, we need to find a proper solution in North America,” he said. “Building a plant ourselves is maybe more unlikely. I’m looking for a partner that could help us utilize a North American plant.”

Reports indicate that two manufacturers are currently in negotiations with Volvo, although Jacoby has been cagey about revealing names. The partner could be located in the U.S. or Mexico, according to to Jacoby’s preferences. Industry insiders see any Volvo partner in North America as one that shares development costs on Volvo’s roster of smaller vehicles. Problems stemming from the automaker’s heavy dependence upon the euro could be eased by moving assembly facilities into a pre-existing North American plant.

Call me, Sergio

By 2020, Volvo’s goal is to double sales to 800,000 cars and SUVs. In 2011, there were 449,255 total deliveries. Over the next several years, Volvo plans to invest as much as $11 billion into the construction of factories in China. But the automaker would like for its North American fortunes to follow suit.

Fiat SpA is a desirable partner option, said Jacoby. As a part of Chrysler Group LLC, Fiat is already active on the North American stage.

“Fiat is obviously one of the alternatives,” Jacoby said. “If you speak to Marchionne, just tell him to call me.”

SUV on the way

Jacoby recently affirmed that Volvo is planning a new low-cost SUV for the Chinese market, reports Automotive News. With the construction of new production plants in China “on track,” including one in Chengdu, Volvo plans to roll out the new SUV by the second half of 2013.

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