A trade war between the US and the EU is "worrying."
The automotive industry is currently in a state of bother after President Donald Trump threatened tariffs against China and the European Union. We've already seen the threat of a trade war delay Chinese automakers' plans to enter the US market and several European automakers are also facing pressure. Volvo has been particularly bothered by the situation because it manufactures cars in the EU and China.
The Swedish automaker has been forced to shift XC60 production from China to Europe while it waited to get an exemption for its Chinese-built cars. The situation does not seem to be improving - as speaking with Automotive News, Volvo CEO Hakan Samuelsson said a potential trade war is "worrying."
"The [Trump] administration wants us to build cars in [the] US and reduce the trade deficit. By coincidence, we are doing exactly that," Samuelsson said. Volvo recently opened a factory in South Carolina to build the new S60 but it may not be able to hire as many workers as initially anticipated due to the looming threat of tariffs. Samuelsson explained that when the decision to build the factory was made back in 2015, trade tariffs were not a deciding factor.
"We will eventually build 150,000 cars in the US, of which half will be exported. And we will sell about the same number there," he said, referring to the company's sales mix of domestically and foreign-built cars. "I hope the administration sees that and taxes somebody else."
Volvo was also forced to delay plans for its initial public offering because of the current trade tensions. Samuelsson says the IPO is not currently on the agenda because "we are focusing on making Volvo great again." We hope Volvo is able to make it through this mess because we are excited to see the company's newest models like the recently-revealed Polestar 2.