Volvo could suffer a significant blow if U.S. starts imposing tariffs on imported cars, despite their new planned factory in South Carolina and their plans of hiring up to 4,000 workers, according to the chief of its North American operations.
Their concern comes after the possible trade restrictions such as the bordex tax proposed by U.S. President Donald Trump.
“It’s very bad business for us unless we transfer all that extra money towards the list price,” Volvo North America Chief Executive Officer Lex Kerssemakers told Reuters. “The customer is the loser, or we are the loser. Everybody’s the loser.”
Kerssemakers also said that Volvo chose to build its first North American factory in the United States, instead of Mexico back in 2015. Volvo’s new South Carolina plant is the latest in a long line of new factories from Asian and European auto-makers in the southern United States and Mexico.
These new factories contributed to the decline of the industry’s presence in Midwest states, including Michigan, Ohio, Indiana and Wisconsin, states that proved to be crucial for Trump’s election campaign.
Volvo plans to build the new S60 in the new U.S. factory, which is set to open in late 2018. The estimated economic impact in South Carolina is about $4.8 billion. “This is the only place in the world where we are going to build S60,” Kerssemakers said. “People are moving to SUVs, but the sedan market is still the third- or fourth-biggest segment in the United States.”
PHOTO
