Volvo Cars Plans Cost Reductions

Volvo Cars Corp. must undertake "considerable" cost cutting to reach its goal of breaking by 2014, CEO Hakan Samuelsson tells The Wall Street Journal.

All spending except product development is under scrutiny as Volvo strives to reduce costs by more than 1 billion kronor (€116 million), according to Samuelsson.

The company's global sales fell 6% to 422,000 vehicles last year, including declines of 10% to 227,000 units in Europe and 11% to 42,000 units in China. Samuelsson says those trends mean it is more "possible and realistic" that Volvo will attain reach breakeven next year instead of in 2013 as it had hoped.

Volvo, which is owned by China's Zhejiang Geely Automobile Holding Co., aims to nearly double its sales to 800,000 vehicles by 2020.

The company has launched a five-year, €8.5 billion overhaul of its plants, vehicles and powertrains, which includes two car plants and an engine factory in China.