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Volvo Upping XC60 Production, Mulling Selling Chinese-Built Cars in U.S.

Volvo’s ambitious sales goals — including increasing the number of XC60s ported to North America — certainly seem lofty, but perhaps not quite as much as the idea of bringing a Chinese-built Volvo to the U.S. market.

After a strong eleven-percent sales increase in 2010, Volvo is looking to expand production of its XC60 crossover SUV by an additional eight percent in 2011. A predicted increase in U.S. demand for the model is pushing Volvo to build over 100,000 examples over this coming year. That bump, along with demand for the all-new 2011 Volvo S60 sedan, may help Volvo’s global sales rise six- to seven percent in 2011 (for the record, Volvo sold 373,525 cars worldwide in 2010).

Encouraging news, but it’s still a little short of Volvo President and CEO Stefan Jacoby’s vision of doubling that figure by 2020. That’s a steep goal, especially after Volvo lost ground in the lucrative U.S. market — sales in 2010, for instance, slid twelve percent.

Bringing new models to the States could certainly help Volvo reclaim its former glory, but one idea currently being floated to do just that is a little unconventional. With the help of Geely, its new ower, Volvo is preparing to build a new assembly plant in China. Previous reports suggested that factory would only build cars for the Chinese market, but the Wall Street Journal now suggests the automaker is considering bringing Chinese-built Volvos into the North American market. Unusual, perhaps, but utilizing the Chinese plant would give Volvo some flexibility in weathering flucuating exchange rates, while addressing production capacity concerns at its existing European facilities. No established automaker has yet to import Chinese-built cars to the States; however, this arrangement would be pending approval of the Chinese government.

We will see if Volvo can make its lofty goals in the next decade. Not only could it be posting some record sales, it could also break new ground by being an industry first, although we’re not entirely certain how well buyers would take to a Volvo built near Shanghai, not Sweden.

Sources: Bloomberg, Wall Street Journal

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