Volvo said the parties will evaluate China Development Bank's financing of Volvo Car.
Volvo Car Corporation and China Development Bank Corporation today announced the signing of a Memorandum of Understanding (MoU) for a “strategic partnership.” The announcement came as Prime Minister Wen Jiabao of the People’s Republic of China visited the Volvo Car Corporation facilities in Gothenburg, Sweden. Earlier this week the communist leader was in Wolfsburg to announce a further expansion of Volkswagen Group manufacturing in China. (Volkswagen Group To Build New Plant in Urumqi China)
In 2011, Volvo sold 449,000 vehicles globally, not enough to finance internally new platforms and or plants, both of which the Chinese-owned company needs to survive in the global auto business. The growth plan for the Chinese market is vital to the 2020 global sales target of 800,000. Volvo Car has slowly returned to profitability with a profit of 477 MSEK in the first nine months of 2011, the latest results.
In a release, Volvo said the parties will evaluate a possible cooperation with China Development Bank’s financing of Volvo Car Corporation research and development programs in “efficient energy technology, as well as production facilities” in China.
“It will assist us in realizing our ambitious growth plans for the Chinese market and enhance our ability to develop clean, efficient driveline technologies,” said Stefan Jacoby, CEO & President of Volvo Car.
Jacoby said, the main purpose of the intended is to safeguard Volvo’s long-term competitiveness in the global automotive market and to develop and intensify cooperation within the Sino-Swedish automotive industry.
