IS IT REALLY CHINESE?

Chinese auto imports to US may be more Swedish

The first Chinese-made automobile to be sold in the United States may have more Swedish heritage than Chinese. Media reports indicate that Volvo, owned by China’s Geely, plans to sell a Chinese version of its S60 sedan in the US as early as next year.

In 2010, Geely purchased Volvo in a $1.5 billion deal from Ford Motor Co. Acquiring the legendary Swedish automaker represented an unusually large deal for a private Chinese company. Zhejiang Geely Holding Group is the parent company of Volvo Car Corp and Geely Automobile Holding Ltd.

WardsAuto forecast data has the S60 coming to the US from China next year. “The move to export Volvos will be a big one symbolically for China. If successful in the market, it would prove that China can compete here. It also would demonstrate that American buyers are willing to purchase cars from China, which could encourage other multinationals to ship product from there to the US,” David Zoia, editorial director at WardsAuto told China Daily in an e-mail.

Sean McAlinden, executive vice president of research and chief economist at the Center for Automotive Research in Ann Arbor, Michigan, said it may be likely that some S60s will be imported into the US from China. But it will depend on Swedish production levels, and whether there are serious design issues (especially regulatory) between the two sources.

“A Chinese S60 will be perceived as a Volvo – not Chinese – so it may help the company in terms of a larger profit margin,” he e-mailed.

McAlinden also sees a Volvo made in China and sold in the US as a watershed moment for China’s auto industry. “Currently, China does not export any worldclass luxury cars which require the highest levels of design and assembly quality. If a Chinese S60 succeeds, it means other luxury vehicle from China can be accepted in the world market. Much respect will be gained. The US market is the most openly competitive in the world..”

Zoia said there could be a cost advantage in importing cars from China instead of Sweden, but where Volvo gets vehicles from is less important to its US recovery than simply having competitive products in the market again. “Volvo’s product lineup in the US is dated, and the brand has slipped off the radar of most luxury-vehicle shoppers. So it is in dire need of its planned product infusion in order to begin to mount a comeback here. Even with the infusion of new models, Volvo will have a long climb back to relevancy in the US,” he said.

Volvo reported 2103 sales of 427,840 cars. A total of 61,233 cars were sold in the US in 2013, compared with 61,146 in China.

“Volvo’s revival in the US depends on a more robust vehicle lineup – it is not dependent on just one product,” wrote Stephanie Brinley, senior analyst at IHS Automotive in an e-mail.