Volvo Car Corp. (175), the Swedish automaker owned by Chinese manufacturer Zhejiang Geely Holding Group Co., is seeking a partner that can help it build vehicles in North America.
“In the medium term, five to six years, we need to find a proper solution in North America,” Volvo Chief Executive Officer Stefan Jacoby said in an interview today. “Building a plant ourselves is maybe more unlikely. I’m looking for a partner that could help us utilize a North American plant.”
Cooperation would ideally be with any carmaker that Volvo agrees to work with on sharing development costs on smaller cars, Jacoby said in the interview at an Automotive News conference in Monaco. The Gothenburg, Sweden-based carmaker is talking to a “couple” manufacturers, the German executive said, declining to name the potential partners.
Volvo, which Zhejiang Geely bought from Ford Motor Co. (F:US) in August 2010 for $1.8 billion, has a target of almost doubling sales to 800,000 cars and sport-utility vehicles by 2020 from 449,255 deliveries in 2011. It plans to invest about $11 billion over the next several years, including construction of two car factories and an engine plant in China.
Volvo is “open to everybody” as a partner, including Fiat SpA (F), Jacoby said. The Turin, Italy-based carmaker is already active in the U.S. through the takeover of Chrysler Group LLC that’s part of Fiat Chief Executive Officer Sergio Marchionne’s growth strategy.
“Fiat is obviously one of the alternatives,” Jacoby said. “If you speak to Marchionne, just tell him to call me.”
Volvo is posting losses in the U.S. while it’s profitable in Europe, said Jacoby, whom Zhejiang Geely recruited in 2010 from his job running the U.S. business of German carmaker Volkswagen AG. (VOW) The executive reaffirmed Volvo’s plans to build a low-cost vehicle in China that the Swedish company will market jointly with local sister brand Geely Automobile Holdings Ltd. The model is likely to be a small SUV, he said.
The construction of the plants in China, which is still waiting final government approvals, is “on track,” Jacoby said. The first factory, in Chengdu, is set to start producing cars in the second half of 2013, he said.
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