Volvo Car Corporation, the Swedish automaker owned by China’s Zhejiang Geely Holding Group Co., said that they would be closing its plant in Uddevalla, Sweden, in 2013 because of insufficient volumes. Ford Motor Company sold Volvo last year to Zhejiang Geely for almost $1.5 billion.
The plant is responsible for the manufacturing of Volvos C70 convertible, which is co-owned by Italian car design company Pininfarina SpA (PINF). The factory produced 10,000 cars last year and is now working 65% of its capacity, says Volvo.
“The low volumes in the Uddevalla plant do not justify continued production,” Chief Executive Officer Stefan Jacoby said in a statement on the company’s website. “A car manufacturer of Volvo’s size cannot, from a financial standpoint, justify a plant that manufactures one single model in the low volumes we have today.”
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Volvo, which is based in Gothenburg, Sweden aims to more than double their annual sales to 800,000 cars by 2020. They are prepared to invest as much as $11 billion over the next 5 years to meet certain demands in the market, including China.
Volvo and Pininfarina agreed back in March to end their joint venture and Volvo will buy them out in 2013 and then close the factory. All of the 600 workers at the factory will be offered jobs at not only the main factory in Gothenburg, but also at other Volvo plants.