Volvo Car expects China to become its biggest market as early as next year and its second home market after Sweden as the Chinese-owned automaker looks for sales to grow more than six times by 2015, a top company executive said.
Volvo, owned by the parent of Chinese automaker Geely Automobile Holdings Ltd (0175.HK), is aiming to boost sales in China to 200,000 cars by 2015 from a little over 30,000 last year, riding the wave of rapid growth in the world's biggest market, especially for premium vehicles, the head of its China operations said.
I would say (China will be the No. 1 market) in the next couple of years -- hopefully one year, Volvo Car China Chairman Freeman Shen told Reuters on Tuesday on the sidelines of the Detroit auto show.
We are looking at a strategy of making China a second home market. Today we mainly only have one home market, in Sweden, he said in an interview.
Last year, Volvo's sales in Sweden were roughly double the sales in China, at nearly 60,000 units. Volvo is looking to set up a local factory in China to get to its 2015 goal, joining dozens of automakers in the crowded market.
China's auto market grew 33 percent in 2010, when much of the demand was fueled by government incentives on smaller, entry-level cars.
Growth forecasts for this year are much lower, ranging from 10 to 15 percent, but Shen said Volvo will grow much faster since the expiration of tax and other government-backed incentives is likely to hit mass-market brands the hardest.
It's not bad news for the premium car; it's really bad news for the low-end mass car, he said. We need to grow much faster than the market.
Volvo will more than double the number of dealerships to 230 by 2015 from about 100 now to support the growth, he said.
Volvo Car was acquired by Zhejiang Geely from Ford Motor Co (F.N) last year, marking China's biggest acquisition of a foreign car maker.