124663 large 01 Volvo XC60 recall

Volvo Looking To Manufacturing Partner for North American Production

124663 large 01 Volvo XC60 recall

These days, everyone is looking to source automotive manufacturing in the United States. Currency exchange issues and lower wages (thanks to the poor economy) are driving this trend. On the luxury side we’ve seen this with BMW and Mercedes-Benz, and Audi has signaled it is considering building a plant here of its own.

The latest automaker to join the chorus is Volvo, which under the ownership of Geely, has charted out an ambitious future growth plan. Volvo aims to increase share primarily in China and in the U.S. Sales of the XC60 are hot here, and Volvo is unable to build enough of them. They’re hoping to replicate that success more in the future and to make money thanks to local production.

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Currently, Volvo is losing money in the U.S, while posting profits in Europe. Given that we doubt U.S sales will expand that heavily, does building its own plant make sense though? Probably not. BusinessWeek reports that Volvo is looking for a manufacturing partner instead. “In the medium term, five to six years, we need to find a proper solution in North America,” says Volvo Chief Executive Officer Stefan Jacoby. “Building a plant ourselves is maybe more unlikely. I’m looking for a partner that could help us utilize a North American plant.”

Jacoby mentioned one automaker in particular:Fiat. That partnership would make a lot of sense. Fiat is highly open to alliances, as we can see with Chrysler and the recent MX-5 deal with Mazda. And boy, Fiat’s partnership history goes back a lot further than that. It never seems to work out too great for the other party though….hmm. Volvo and Fiat could be the perfect fit. Jacoby’s comments don’t indicate talks are very advanced though. Speaking with BusinessWeek, he said “If you speak to Marchionne, just tell him to call me.” We’ll be sure to do that.

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