Volvo considering North American production

DETROIT -- Volvo's review of its business includes possibly building cars in the United States, the brand's CEO said today.

" It could be an avenue that we will explore," Fredrik Arp said in an interview here at the auto show.

Volvo embarked on an intensive review after the announcement late last year by parent Ford Motor Co. that the U.S. carmaker planned to keep the premium marque.

Volvo's global sales rose 7.1 percent in 2007 to a record 458,323. But the company's gains were almost entirely canceled out by the falling dollar.

Said Arp: " Over the past three-four years, we have lost very significant money because of the dollar decline."

The Volvo chief said Ford's plan to develop global platforms makes it possible to share production sites in the United States and elsewhere. Previously, such cooperation was only possible between Volvo, Ford of Europe and Jaguar-Land Rover. That doesn't provide a natural hedge against a dollar decline, Arp noted.

Arp said the review of Volvo's business will be completed in the second quarter. He said the review also will look at the brand's product lineup, pricing techniques, brand development and other issues.

The Volvo CEO said the brand will not compete head-on against premium brands BMW, Audi and Mercedes-Benz. Arp said Volvo will continue to emphasize its Scandinavian heritage, mostly in its design, as well as safety and environmental credentials.