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Volvo citing US and China trade dispute

Auto News - Published on Mon, 12 Nov 2018

Image Source: The Independent
Automotive News reported that Volvo Cars continues to shake up production plans for much of its lineup in an effort to dodge tariffs the US and China have slapped on auto imports. The Swedish automaker owned by China’s Zhejiang Geely Holding Group Co has canceled plans to export S60 sedans from its first US plant to China, just months after starting output. Volvo also will stop importing XC60 SUVs and dramatically reduce shipments of S90 sedans from China to the US.

Volvo will pivot to mostly exporting S60s from its factory near Charleston, SC, to focus mostly on supplying the American market, according to Anders Gustafsson, the president of the carmaker’s US unit.

Mr Gustafsson said that “We’ll go at this change not with a smile, but we know what we need to do. We have a global manufacturing structure that helps us maneuver in these tough waters.”

President Donald Trump imposed tariffs of 27.5 percent on Chinese auto imports in July. China’s Xi Jinping returned fire by lifting levies on American autos to 40 percent.

The dispute has dragged on profits of Volvo peers including BMW AG, which said this week that higher duties were partially to blame for its underwhelming earnings.

Mr Gustafsson said that Volvo hasn’t passed along the cost of the tariffs to customers of the XC60s it imports from China and that is taking a big toll on the carmaker’s profits. He said that “We are absorbing the tariffs, and that really is what you saw in our financial results. But we can, under no circumstances, absorb tariffs in the long run. It’s huge.”

Source :

Posted By : Joykumar Irom on Mon, 12 Nov 2018
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