Volvo Cars Studies How to Ease Currency Pressures

CEO Stefan Jacoby tells the Financial Times that Volvo Car is considering ways to temper the negative impact of the strong Swedish krona on the profitability of the cars the company sells in the U.S.

Jacoby says the options include importing vehicles from China, using more American-made components or even producing vehicles in North America. Volvo, a unit of Zhejiang Geely Holding Group Co., is erecting two assembly plants in China, the first of which is slated to open by mid-2013.

Jacoby suggests that shipping vehicles from China might be only an interim solution, since Volvo would still be vulnerable to currency fluctuations between the yuan and the dollar.

He told Bloomberg News in June that Volvo wants to find a partner to begin sharing vehicle production in North America five or six years from now. Jacoby said the company is unlikely to erect its own factory.

Volvo's operating profit plunged 84% to 239 million kronor (€28 million) in the first half of this year, partly because of Europe's slumping auto market. Results also were hurt by the krona's gains against the dollar, which squeeze profit margins on the Swedish-built vehicles Volvo sells in the U.S.