Volvo Borrows Another $800 Million from Chinese Bank

Volvo Car Corp. has secured a second loan from China Development Bank, this one for $800 million, to help fund product development and strengthen its capital structure.

The carmaker secured a loan for €922 million ($1.2 billion) under the same amortization and terms from the bank last year.

Volvo Cars was acquired from Ford Motor Co. by Zhejiang Geely Holding Group Co. for $1.8 billion three years ago. The company says it will make an undisclosed drawdown on the new loan before year-end, with others planned for 2014 and 2015.

Volvo expects to sell about 423,000 vehicles worldwide this year and hopes to achieve annual volume of 800,000 units by 2020, including 200,000 in China.

The company has launched a five-year €8.5 billion ($11.5 billion) program to update its plants, products and powertrains, including two assembly plants and an engine factory in China.