Volvo Is Losing Ground in the Chinese Market
The growing dominance of local manufacturers in the electric vehicle market has significantly affected the Swedish company's sales.
Volvo Car AB CEO Hakan Samuelsson said demand for Western-made cars in China is declining rapidly. The growing dominance of local manufacturers in the electric vehicle market has significantly affected the Swedish company's sales. As a result, Volvo has been forced to implement layoffs affecting approximately 6% of its workforce.
According to Samuelsson, the old strategy of selling high-priced Western cars in China can no longer deliver the same success. He also admitted that the company had failed to fully anticipate the rapid changes in the Chinese automotive market.
Volvo, which has been owned by China's Geely since 2010, plans to rely more heavily on its parent company's technologies and infrastructure to remain competitive. Samuelsson said success in China requires locally developed software and vehicles tailored to regional needs.
The company reported a larger-than-expected loss in the third quarter and aims to cut costs by 5 billion Swedish kronor (approximately $504 million). Volvo also cited US tariffs and the removal of incentives for electric vehicles as factors negatively affecting its financial performance.
To improve its position, the company plans to launch seven new vehicles for Western markets and six models specifically adapted to China by the end of the decade.