Brussels, June 10, 2024 — Volvo Cars is relocating the production of its Chinese-made electric vehicles to Belgium, a move anticipated to shield the company from potential European Union restrictions on Beijing-subsidised imports, according to a recent report by The Times.
The Swedish automaker is preparing for possible trade barriers stemming from the EU’s investigation into Chinese state subsidies. This decision affects Volvo’s EX30 and EX90 models, ensuring the company can continue sales uninterrupted within the European market.
A Volvo spokesperson told that while the outcome of the EU’s probe remains uncertain, relocating production is a proactive measure to mitigate potential disruptions.
“It is premature to speculate on the implications of what this investigation will conclude or any potential measures,” the spokesperson said, emphasizing that the company’s strategy is to manufacture vehicles close to their primary markets. This approach aims to streamline logistics and enhance market responsiveness.
In a statement, Volvo highlighted that the EX30 production in Belgium is slated to commence in 2025, reinforcing the company’s commitment to European manufacturing.
The EX90, on the other hand, is being produced in the United States, distancing this model from any potential European trade issues related to China.
The strategic shift to Belgium is significant for Volvo’s operations in the UK as well. Manufacturing certain models for the British market may also transition to Belgium, ensuring compliance with any future EU trade regulations and reducing dependency on Chinese imports.
Volvo first announced plans to expand its Ghent plant in October last year, aiming to bolster its production capacity for the EX30 model. This expansion is a part of Volvo’s broader strategy to enhance its European footprint and secure its supply chain against geopolitical uncertainties.
The EU’s anti-subsidy investigation, launched on October 4, 2023, could last up to 13 months, with the possibility of provisional duties being imposed within nine months.
This probe is part of a broader effort by the EU to address trade imbalances and ensure fair competition, particularly concerning imports that benefit from substantial government subsidies.
This investigation comes amid strained EU-China relations, exacerbated by China’s alignment with Russia following the invasion of Ukraine. The EU is increasingly scrutinizing economic ties with China, balancing trade interests with geopolitical concerns.
Volvo’s decision underscores the automotive industry’s broader trend of diversifying production locations to mitigate risks associated with global trade tensions.
By shifting production to Belgium, Volvo not only safeguards its market position in Europe but also aligns with the EU’s push for more localized manufacturing to reduce carbon footprints and enhance supply chain resilience.
As the EU’s investigation progresses, other automakers may follow Volvo’s lead, adjusting their manufacturing strategies in response to evolving trade policies. This trend highlights the growing importance of adaptive production strategies in the face of geopolitical and economic shifts.
Volvo’s proactive measures reflect its commitment to maintaining market stability and addressing potential regulatory challenges head-on.
The automotive industry will closely monitor the outcomes of the EU’s anti-subsidy probe, which could set significant precedents for international trade and manufacturing practices.
This article was created using automation technology and was thoroughly edited and fact-checked by one of our editorial staff members
