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Volvo joins list of govt procurement cars

Updated: 2013-11-15 07:40
By Li Fangfang ( China Daily)

Swedish luxury car brand Volvo said its locally produced models will be included on a central government procurement list, which should help boost its sales in the world's largest automobile market.

"We got word from our sales department today" about its models going onto the central government procurement list for official cars as of September, Ning Shuyong, vice-president of Volvo China, said on Thursday.

But he declined to disclose any other information, such as specific models or purchase numbers, saying only that "further planning depends on the government's final decision".

He also told China Daily that "Volvo is grateful for the government's trust and appreciation".

The move should help boost Volvo's sales, especially for models produced in its new factories in Chengdu, Sichuan province, and Daqing, Heilongjiang province.

The S60L, the first locally produced vehicle to be made after Volvo was acquired by Chinese automaker Zhejiang Geely Holding Group Co in 2010, will debut at next week's Guangzhou auto show.

In the first 10 months, Volvo's sales in China boomed 42 percent year-on-year to 48,000 units, well on track to its target of selling 50,000 vehicles in 2013.

"It could be a golden opportunity for Volvo to grab a bigger share of China's luxury vehicle market," said Zhong Shi, an independent auto analyst based in Beijing.

"Although the purchase numbers are small, the effect that making an official car will have on the brand image and on buyers is significant."

China's premium car market is growing faster than the overall automobile market, and the top three spots belong to German premium brands Mercedes-Benz, BMW and Audi, which racked up more than 70 percent of sales.

"As the Chinese government shifts away from German brands and toward more homegrown cars, Volvo's unique position should ensure a bright future" for the brand, according to Zhong.

With the Sweden-born carmaker now owned by China's Geely, "it's hard to tell whether Volvo is a foreign brand or a Chinese brand, thus it is finding a niche position between the foreign premium brands and China's homegrown" ones, he said.

He told China Daily that Volvo offers the same luxury driving experience as Audi with a higher brand image than Chinese automakers.

Cui Dongshu, the deputy secretary-general of the China Passenger Car Association, agreed that the demonstration effect of brands used as official cars will boost sales to individual purchasers.

"It's something that is reflected in the consumer philosophy of purchasing vehicles in China," said Cui.

Statistics from the association show that in 2012, the government bought 750,000 vehicles in China, accounting for 4 percent of total domestic automobile sales.