Volvo Cars has decided to delay building Lynk & Co branded cars at its plant at Ghent in Belgium because of increased macro-economic uncertainty, a spokesman for the Geely-owned Swedish carmaker said on Friday.
Lynk & Co, co-owned by Volvo’s owner and its two brands Volvo and Geely Auto, began selling its first model in China last year. The vehicle is currently produced at a Volvo-operated plant in Taizho in China.
The original plan, set out in March, was to begin production in Belgium at the end of 2019. But the Swedish company had to replan what cars to produce in which part of the world due to a trade dispute between China and the US that has led to additional tariffs.
“The decision to revise the manufacturing plans for Lynk & Co was taken due to an increased macro-economic uncertainty, and Volvo has reviewed how best we can utilise the group’s global production infrastructure,” the spokesman said.
The changes would not impact employment in Ghent and Lynk & Co’s cars would instead be exported to Europe from China next year, he said in response to e-mailed questions. Volvo also has plans to begin selling Lynk & Co vehicles in the US in 2020.
Mounting uncertainty
With mounting global uncertainty, the company has also been forced to shelve plans to float its shares and like other carmakers, Volvo is now facing added pressure from a demand slowdown in its main market, China.
The company has found itself in need of more free capacity at Ghent, after being forced to move production of its V60 station wagon out to Belgium and China to free up space at its Swedish plant.
This is because by the end of this year it plans to move most of the production of its best-selling SUV, the XC60, for export to the US market to its plant to Torslanda, Sweden from Chengdu, China.
Luxury sedan
The spokesman said Volvo had also decided to produce its S60 luxury sport sedan in China from next year, altering an original plan to manufacture the vehicle only at its US factory and export it to China.