The Swedish carmaker Volvo Group decided to close and stop the production of its bus at the Saffle plant in Sweden in June 2013, which means that 400 people at the Saffle factory will face losing jobs. The production capacity of Volvo 8900 series buses will be moved to the Wroclaw factory in Poland. HÃ¥kan Karlsson, president of Volvo Bus Corporation, explained to the company that “In the past few years, the demand for the European passenger car market has continued to decline, especially in the Nordic market. At the same time, there is also a huge pressure from the price impact. A single factory area will concentrate on the production of vehicle buses. This will reduce the production cost of passenger cars and reverse the downward trend in profit margins.â€
Volvo Buses has a large excess of production capacity in its European passenger car production plant. The company hopes to achieve economies of scale by concentrating on the production of passenger cars in Poland and will help deal with increasingly fierce competition.
“Our employees, together with the employees of Sävre Poland, invested in the development of a new urban passenger car model and the operational efficiency of the vehicle. Unfortunately, due to the current sluggish market demand in the European market, we still have to make such a decision. Karlsson added.
It is expected that this move will reduce the operating profit of the Volvo Group in the fourth quarter of 2012 of approximately 100 million kronor (9 million pounds).
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