Swedish car company must find ways to cut costs
San Francisco, CA -- (SBWIRE) -- 03/01/2013 -- Sweden's Volvo Car Corporation's research and development chief has stated that the company will be looking into a partnership with car companies on parts and vehicle systems in order to cut development costs and compete with the premium small-car market.
Peter Mertens, in an interview at the launch event at Volvo headquarters stated that the Swedish carmaker is now open to creating partnerships with cooperate on parts for the segment that includes the Volvo V40.
Volvo and its owners, China's Zhejian Geely Holding Group, will not team up on a car brand for the Chinese markets, according to Mertens. Instead, the two will work to find a synergized structure to attract a third party in order to collaborate.
"We are also looking for some alliances in terms of using components and systems broadly with other partners, and the most logical thing is obviously to use these kinds of economies of scale and cooperation inside of the Geely group," Mr. Mertens said. "Longer term, [the small-car class] is a segment where the economies of scale matter a lot, and the sensitivity to costs is extreme in that segment, so it would be a natural area where you try to find some cooperation," he said.
While the car maker is not currently interested in sharing its vehicle architecture, Lex Kerssemakers, who is product-strategy chief, opened the door for future collaborations.
"We have an extremely good platform to offer so if you know somebody, tell them to give us a call," he told reporters.
Volvo has struggled within the ever-weakening European economy and the lack of growth in both North America and China. The company is looking to cut through $158 million in costs in the near future. The reduction will be necessary for the company to break even in 2013. Those in the company say it is more realistic to consider 2014 as a date for cutting those costs.
In addition to the cost-cutting, the company is rushing to update the overall vehicle portfolio. Volvo recently unveiled upgrades to six models that are noted for boosting safety, reducing fuel consumption, and locating more premium buyers.
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