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 issue.
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.