Jacob: Volvo will insist on the layout of pure electric vehicles in China

On November 8, Volvo Car Corporation signed a memorandum of strategic cooperation for new energy vehicles with Shanghai International Automobile City Group. According to the memorandum, Volvo will launch 250 C30 electric vehicles and provide them to institutions and partners in Sweden, Belgium, Germany, Norway, China and the United States.

Recently, Stephen Jacobs, president and chief executive officer of Volvo Car Corporation, and Shen Hui, senior vice president of Volvo Car Corporation and chairman of China, expressed their esteem for the Chinese market. Jacob said, "The most important thing now is that Volvo has at least the Chinese production base, so we are waiting for the approval of the Chengdu factory."

Jacob said that it is expected that the share of pure electric vehicles in global car sales will be less than 5% by 2020. In this case, Volvo, with its strict European heritage, insists on the layout of pure electric vehicles in China, and it is not difficult to see its emphasis on the Chinese market. Shen Hui said that Volvo Cars is a unique automotive brand and is familiar with China's policies and regulations and will continue to promote the development and mass production of electric vehicles and hybrid vehicles.

2011 Profit Reporter: Please tell us about the profitability of Volvo Cars.

Jacob: From January to October this year, Volvo’s global sales increased by more than 22% year-on-year. Among them, the Chinese market increased by 104% year-on-year in October this year, and sales in the first 10 months increased by more than 50%.

In 2010, Volvo Cars has achieved profitability, and Volvo Cars continued to maintain profitability in 2011. From January to October this year, the estimated profit of Volvo Cars is 500 million yuan, which is lower than last year's figure. The main reason is that Volvo has implemented more investment plans in China, including Engine technology investment, electric vehicle technology investment, and China market expansion and other investment projects.

Reporter: What are the new model plans for Volvo Cars in the next few years? How is the construction of Chinese factories?

Jacob: Volvo Cars currently offers a very attractive product line for Chinese consumers. We focus on the most attractive luxury car segment.

Shen Hui: The construction of domestic factories is currently under the relevant regulations of the state, and everything is done in accordance with the laws and regulations of the country. We are very confident about this and hope to have good news early.

Reporter: After realizing localized production, it is estimated that the sales volume in the Chinese market will account for about 100% of global sales.

Jacob: About a quarter, it is expected to be achieved in the next 5 to 6 years.

Most valued at the production base Reporter: At present, there are not many commercial electric vehicles, let alone “luxury electric cars”. What do you think of the market space?

Jacob: It is predicted that in 2020, the share of pure electric vehicles in global car sales will be less than 5%, and consumers will not be willing to bear the increased cost of electric vehicles. Therefore, we should not only focus on pure electric technology, can be the traditional engine superimposed hybrid, or the traditional car to add electric technology. This new energy vehicle, including electric vehicles, may have a relatively large share in the future market. But this does not mean that we should abandon our continued investment in pure electric vehicle technology.

Reporter: Now that there are manufacturers of mass-produced electric vehicles, there is an approximate timetable in the Chinese market, including BMW, Mercedes-Benz, and VW plans to produce electric cars in China from 2013 to 2014. Does Volvo Car have such an arrangement, such as when it is produced electric cars in China?

Jacob: Under the circumstance of mature conditions, we will continue to promote the research and development of electric vehicles in China, as well as research and development for the Chinese market, given that our technical forces have related R&D and engineering capabilities. Our Chengdu plant is still in the process of approval. After the further announcement of the factory, there will be more news.