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Volvo Plans On Closing A Swedish Factory In 2013

2012 Volvo C70

It seems that Volvo is having some major problems at its plant in Uddevalla, Sweden because there aren’t enough orders for the C70 folding hardtop convertible and for this reason they’ve decided that they are going to close it in 2013.

This factory is co-owned by Volvo with the famous Italian car design firm Pininfarina and in 2010 they rolled out only 10,000 cars and now they’re working at 65% of the plant’s total capacity. If you didn’t know, a car company usually needs at least 80% of utilization in order for a plant to be considered profitable.

By 2020, the Swedish automaker Volvo plans on doubling its annual sales to 80,000 units and to do so they are going to invest $11 billion in the next five years. One of the reasons for this major investment is to meet the increasing demand in markets like China where they plan on opening two new factories.

In 2010, Volvo was sold by Ford to Zhejiang Geely Holding Group Co. from China for approximately $1.5 billion. The 600 workers that are now at the Uddevalla plant won’t lose their jobs as Volvo said that they will be transferred to other plants owned by the company, including the main one in Gothenburg. Back in March, Volvo and Pininfarina agreed to end their joint venture and the Swedish company will buy out Pininfarina in 2013 and after that they’ll close the factory.

Source: Volvo via Automotive News

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