Following extensive discussions, Volvo Car Corporation and the Swedish Government have agreed to put on hold their negotiations for a state guarantee of loans to Volvo Cars from the European Investment Bank. Volvo Cars and the Government have reached this position jointly, principally in consideration of Ford's Strategic Review which could lead to a sale of Volvo Cars.
In December 2008, the European Union approved 16 billion Euros for four years to the European Investment Bank (EIB) to lend to the European automotive industry in support for green technologies. Later in the same month the Swedish Government reserved 20 billon SEK for guaranteeing these loans. In March 2009 the EIB approved loans of 200 MEURO for Volvo Cars for 2009, subject to availability of a state guarantee.
"We have had a constructive dialogue with the Swedish Government and they have been very supportive of Volvo Cars' business case all along", says Stephen Odell, President and CEO of Volvo Car Corporation.
The loans were planned to provide financing to support projects related to environmental technologies which are currently ongoing at Volvo Cars.
"We are disappointed that we have not been able to come to an agreement. Our competitors in other markets like Italy, Germany, France and UK have been able to utilize similar EIB loans which clearly give them competitive advantage during these difficult times", adds Odell.
Volvo Cars will now focus on realizing other governmental inititatives to support its business through for example, market stimulation packages, R&D funding, support to distressed suppliers and competence development. Very little of this has been put in place so far.
In parallel to the negotiations with the Swedish Government, Volvo Car Corporation has opened up a dialogue in other areas where the company operates. These discussions will continue.
For more questions please call
Corporate Spokesperson Maria Bohlin + 46 31 59 65 25
Senior Vice President Public Affairs, Olle Axelson, + 46 31 59 26 00
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