AutoIndustriya.com Team / | November 26, 2013 15:02
Second loan to help aid Volvo break even and regain profitability
In the past three years, Volvo Cars has seen a bit of financial trouble.
The Swedish automaker known as a leader in automobile safety is working to regain profitability, particularly following the acquisition of Volvo Cars from the Ford Motor Company by Zhejiang Geely Honding Group in 2010. Geely was able to purchase Volvo at the time for USD 1.8 billion.
As such, the group acquired a loan in 2012 for USD 1.25 billion. Following a string of problems regarding declining sales, an aging product line and the subsequent departure of former Volvo CEO Stefan Jacoby after a mild stroke, Volvo Cars has again acquired a loan from the China Development Bank for another USD 800 million.
The further USD 800 million of credit is to be utilized by Volvo Cars to develop their products and help the capital structure of the company.
Current Volvo CEO Hakan Samuelsson has reportedly stated his confidence that the Swedish automaker will break even this year following a projected rise in sales on the latter part of 2013.
Currently Volvo is working to develop new platforms that are different from their former parent company, Ford in 2017. New owner Geely are working with Volvo to put up a new, joint R&D center in Sweden.