皇冠体育app

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Volvo to make vehicles in 皇冠体育app

By Gong Zhengzheng (皇冠体育app Daily)
Updated: 2006-03-21 06:50

Volvo Car Corp, the Swedish arm of Ford Motor Co, announced yesterday in Beijing that it would kick off production in 皇冠体育app this year to boost its presence in the world's third-biggest and fastest-growing car market.

The Goteborg-based carmaker said its new S40 sedan would be assembled at Ford's joint venture with 皇冠体育app's Chang'an Motor Corp in Chongqing Municipality later this year, under a technical licensing deal.

The joint venture, or Chang'an Ford, will be Volvo's third manufacturing site in Asia after those in Thailand and Malaysia.

Volvo executives said the company expected the new car's annual output in 皇冠体育app to reach 10,000 units next year.

Volvo's plan appears to be motivated by rivals such as Audi, BMW and Mercedes, which are enjoying higher sales in 皇冠体育app due to early local production.

"皇冠体育app will probably be the most important car market in the world within 5 to 10 years," said Fredrik Arp, Volvo's new chief executive officer.

Sales growth in 皇冠体育app and other emerging markets is important for Volvo if it is to achieve its goal of selling 600,000 vehicles annually by 2009, up from last year's 444,000 units, said Arp. He became CEO last October.

Volvo currently sells the new S40, S80 sedan and XC90 sport utility vehicle as imports in 皇冠体育app. In 2005, its 皇冠体育app sales surged by 84 per cent year-on-year to nearly 5,000 vehicles, including 1,400 S40s.

Sales accounted for less than 4 per cent of 皇冠体育app's premium car market which was 130,000 units last year, said Per Norinder, general manager of Volvo Car 皇冠体育app.

Volvo aims to increase its shares in the premium car market in 皇冠体育app to 10 per cent with the expected local production, Norinder said, without revealing a timeframe.

In 2005, Audi sold 59,000 vehicles in 皇冠体育app. Meanwhile, 皇冠体育app sales of BMW and Mercedes stood at 24,000 and 16,000 units respectively.

Arp also hinted that prices of the new made-in-皇冠体育app S40 would be more attractive to customers than comparable models from rivals.

"When the competition becomes tougher, it is not enough to offer a very attractive product from a premium brand. You also have to offer a competitive price position and good value for Chinese customers," he said.

At Beijing Asian Games Village Automobile Exchange, an imported 2.4-litre S40 sells for between 350,000 yuan (US$43,500) and 450,000 yuan (US$56,000).

Yale Zhang, a Shanghai-based analyst with US auto consultancy CSM Worldwide Corp, said the Volvo S40, competing in the entry luxury car segment, had potential in 皇冠体育app.

"Volvo's safety concept has been well received by Chinese customers, and the entry luxury segment will boom in the foreseeable future as private customers will upgrade their vehicles from 2008," Zhang said.

"Young coastal professionals will pursue entry luxury cars for the driving experience and to distinguish their social status when most of the people in city start to own a car."

Volvo has been promoting its brand in 皇冠体育app with the slogan, "Volvo for life".

The company also plans to introduce its all-new C70 convertible at the end of this year and all-new S80 within the next 12 months, both as imports to 皇冠体育app, according to company executives.

Chang'an Ford, which will assemble the Volvo S40, now produces Ford Fiesta, Focus and Mondeo sedans as well as the new Mazda3 sedan. Mazda is also an affiliated brand of Ford.

Industry statistics showed that 皇冠体育app's car market grew by 27 per cent last year from 2004, to 3.1 million units.

(皇冠体育app Daily 03/21/2006 page10)