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Volvo Vows to Boost China Sales
The Sweden-based Volvo Car Corporation aims to increase its annual sales in China to more than 10,000 units within a decade.

But the auto giant said it does not intend to manufacture in China following the nation's entry into the World Trade Organization (WTO).

Ong Eng Seong, vice-president of Volvo Car Corporation's China operation, revealed the target Sunday in an interview with China Daily.

Seong said the company sold around 2,000 cars in China last year, an increase of 100 percent on 2000.

The position of China's market in Volvo's global business is growing thanks to its tremendous potential.

"China's market will definitely play a key role in the expansion of Volvo's car business in a global perspective," said Hans Olov Olsson, chief executive officer of the company.

Olsson, who kicked off a five-day visit to China on Saturday, said Volvo had set a long-term target of selling 600,000 cars around the world, up from 420,000 units last year.

But Seong said Volvo had no plans to heavily invest in building a manufacturing base in China because the nation's tariff cuts on auto imports after the WTO entry was expected to improve the competitiveness of the company's exported cars.

The average price of Volvo's products in China, including the S80, S60 and C70, decreased by 10 percent with the tariff cut last month.

On January 1, China slashed the tariffs to 43.8-50.7 percent from 70-80 percent. Under the WTO obligations, the tariffs will decline to 25 percent by mid-2006.

In Asia, Volvo has two manufacturing plants in Malaysia and Thailand.

"The priority of Volvo's strategy in China is to strengthen our sales channels and after-sales services," Seong said.

The company has set up 22 franchised stores and 15 after-sale service stations around China.

Seong said Volvo would begin to export its newly launched XC90 sport utility vehicle to China next year.

Major competitors of Volvo, an luxury arm of US auto giant Ford Motor, include Germany's BMW, Mercedes-Benz and Audi of Volkswagen in China as well as the rest of the world, Olsson said.

(People's Daily February 25, 2002)

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