The China-based automaker is relying on its crossover models
of ConsumerAffairsKey takeaways:
- Sources indicate Volvo will cancel U.S. orders for the S90 next year, citing the low sales volume of the model in the American market.
- In response to the Trump administration's tariffs, Volvo is also reducing incentives on existing U.S. inventory and exploring increased production at its South Carolina plant.
- The decision highlights the growing impact of the escalating trade war on global automakers with production in China and underscores Volvo's strategic shift towards its higher-volume crossover models in the U.S.
If you've always dreamed of having a big, luxurious Volvo S90, dream on but you'll soon have to confine your shopping to the used-car lot.
Volvois reportedly planning to discontinue U.S. sales of the S90, which is manufactured in China, as trade tensions between the United States and China intensify and as the automaker grapples with newly imposed tariffs on Chinese goods, including vehicles.
Automotive News quoted a person familiar with Volvos strategy, who wished to remain anonymous, as saying that the S90 is a "low-volume car for the U.S.," with only 1,364 units sold in 2024.
"Rather than deal with [the tariffs], they are just going to cut it out," the source explained. The company will reportedly focus on its more popular XC90, XC60, and XC40 crossover SUVs in the American market. A Volvo spokesperson declined to comment, Automotive News said.
PresidentTrump on Wednesday significantly escalated trade tensions by slapping a 125 percent tariff on goods made in China, a fivefold increase from the 25 percent levy applied to vehicles from other countries on April 3rd. Those tariffs will remain in effect even after a temporary pause on reciprocal duties with most other nations.
A slow but steady retreat
Discontinuing the S90 would mark Volvo's further retreat from the shrinking U.S. sedan market. Last summer, the automaker ceased U.S. sales of the S60, which was produced in South Carolina.
Despite a 7.5 percent increase in U.S. sales during the first quarter, reaching 33,285 vehicles, Volvo's global deliveries saw a 5.7 percent decline, with slumps in key markets like Europe and China. The heavy reliance on imports 96.8 percent of Volvo's U.S. sales in the first quarter were imported from Europe or China exposes the company to significant risks from the Trump administration's aggressive trade policies.
In addition to the S90, Volvo's new EX30 subcompact crossover is also sourced from China, although production of that model is slated to expand to Ghent, Belgium, later this year.
Volvo said, however, that it is"ramping up" production of the electric EX90 crossover at its currently underutilized Ridgeville, S.C., assembly plant to boost volumes and reduce costs.
To deal with the increasing costs of importing vehicles into the U.S., Volvo is also adjusting its incentive strategy. While sticker prices are not expected to change for now, the automaker plans to implement "minor incentive changes," a company executive said. This includes reducing discounts on imported vehicles already in the U.S. before the tariffs took effect. The company intends to use these savings to offset the financial burden of future imports subject to the higher tariffs.
Posted: 2025-04-10 18:57:38
