Can Volvo Hide the “Made In China” label?

Published on Author santangeloz17

Volvo recently announced that they are planning to sell the first ever Chinese built car in the United States this year. China, a country known for producing goods focused on value rather than quality, will take a swing at the luxury car market with the Volvo S60, a midsized luxury sedan.

Chinese products have had the stigma of being low quality in comparison to Japanese, American, or European-made products. As China becomes more educated and modernized, the quality of their goods is fast improving. However, Chinese companies will still have difficulty selling Chinese made goods to high-end US and European markets simply because of the negative stigma. Volvo, a now Chinese owned company, might have solved this s60

In 2010, the Chinese car company Geely purchased the brand Volvo from the Ford Motor Company. Since then, they have struggled to maintain sales growth. Recently, they made the decision to start producing the S60 in China and to sell it into the US market. This
move will allow Geely to produce the S60 with fewer costs. In order to succeed, they must maintain the European feel so the American consumer still believes he or she is purchasing a European car.

This move could set a precedent for other Chinese companies to export products into high-end United States and European markets. By acquiring the names of European and American goods, they can manufacture the product for less while maintaining the same image as before.

Source (text and media): Gorzelany, Jim. “First China-Built Car Headed To The U.S. This Year.”Forbes Magazine, 15 Jan. 2015.

One Response to Can Volvo Hide the “Made In China” label?

  1. How readily can a company with a (deservedly) weak reputation transfer production know-how to another location? We know that car companies build new factories all the time, so teething problems aside it should prove possible for Volvo’s S60 to meet near-luxury car standards. We might not want cars engineered in China by staff for whom it is their first vehicle project. That’s not what’s happening: these are Swedish designed and sourced vehicles that just happen to be assembled in China, not Europe. So have no fear??

    Consumers on average don’t know where their car is made, even if they appear to care. Honda is really an American company with a large operation several other countries including Japan, where it happens to have its headquarters. Do people know which Toyota’s are American, which imported – and of those, which imported from Canada? In general, “no”. So as long as Volvo stresses its Swedish identity, its European safety, purchasers may never realize their car wasn’t made in Gothenburg.