Volvo Car Corporation will build the next generation of medium-size cars, the so-called P1 platform, in the company’s factory in Ghent in Belgium.

One implication of this decision is that the Volvo Cars Torslanda plant in Göteborg will become the main factory for the company’s larger cars, those built on the P2 platform. Production capacity at Volvo Cars Ghent will be doubled from 160,000 to 325,000 cars annually, while Volvo Cars Torslanda will increase its production capacity from 170,000 to 230,000 cars a year. “We can now concentrate our volume production to two factories, which gives us economy of scale advantages and the possibility to effectively rationalising our activities further,” says Curt Germundsson, Senior Vice President, Manufacturing.

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The executive management of the Ford Motor Company has now ratified the decision When the capacity of the factories is fully utilised there will be a need for some 1 800 more employees in Ghent and some 800 more in Torslanda.

To the production figures from the factories in Ghent and Torslanda should be added the 45,000 or so cars that we will produce every year in the Uddevalla plant and in Volvo Cars CKD-operations in Thailand, Malaysia and South Africa.

Following on from the withdrawal of Volvo Cars from its 50-percent ownership stake in the NedCar factory in the Netherlands the company had the need to find a suitable alternative for the production of cars on the P1 platform.

“By investing in expanded final-assembly facilities in Ghent and allowing the Torslanda plant to concentrate on the larger cars, we will reach the established target in our existing Volvo factories, which is a major benefit,” explains Curt Germundsson. “Both Ghent and Torslanda are high- quality production facilities, and Ghent has ably demonstrated its superb quality by winning several international awards.”

All in all, Volvo Cars will invest in the region of about 4.5 billion SEK in its factories. Most of this, about 3.5 billion, will go to Ghent, which needs a 50,000 square metre expansion of the final-assembly plant and additional equipment in the form of welding robots, paintshop robots and so on.

The Torslanda factory has the necessary buildings and other premises; here, the main thrust of the one billion investments is to extend and update the production equipment.

The updated factories are expected to be commissioned in 2003. The Ghent factory will then make the forthcoming models based on the P1 platform, as well as the Volvo S60; a car based on the P2 platform that will be launched in August.

Torslanda will make the Volvo S80 and VolvoV70 in all their model variants.

The Uddevalla factory will continue to specialise in the Volvo C70 models while the CKD factories in Thailand, Malaysia and South Africa will undertake final assembly of cars based on both platforms.

“The decision will have a major impact throughout Volvo Car Corporation, our suppliers and, not least, on the Göteborg and Ghent regions,” concludes Curt Germundsson.