Living in a globalized world requires cooperation between countries, balancing national interests in terms of economic productivity and prosperity. Politics, however, still plays a significant role in that endeavor as Volvo is starting to discover.
According to German publication Automobilwoche, the ongoing trade dispute between the US and China has forced Volvo to make a decision: it no longer plans to export future models from China to the US as well as Europe.
"Given the recent developments in trade policy, I do not think it is likely that we will do this," said Volvo CEO Hakan Samuelsson. "We will produce our vehicles where we will sell them," he added.
For example, the Volvo S90 sedan and XC60 SUV are built at separate factories in China, but they're also manufactured in Sweden. This solves things for both Europe and the US. In 2018, Volvo sensed US-China relations were starting to sour, so it decided to build US-bound XC60s in Europe only. Volvo also built a brand new production plant a few years ago in South Carolina, currently home to the Volvo S60 sedan. It can easily accommodate additional models such as the brand's popular SUVs.
Volvo was the first premium brand to export a Chinese-made vehicle (XC60) to the US back in 2015 and this was a pretty big deal. It could have paved the way for not only additional Volvos, but those from rival brands who also have Chinese plants.
Since then, politics has gotten in the way of doing business and Samuelsson has made clear China to US exports are a thing of the past. Meanwhile, Samuelsson also confirmed Volvo's planned merger with Geely Automobile Holdings is temporarily on hold as the latter aims for a market listing in China. Chinese-owned Geely purchased Volvo from Ford back in 2010.
Despite the planned merger, Volvo has concluded Chinese-built vehicles exported to the US will be met with additional tariffs for the foreseeable future, and this is simply not acceptable.