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Volvo Cars has no current plans for stockmarket listing - CEO
[STOCKHOLM] Volvo Cars, owned by China's Geely, has no current plans to go for a stockmarket listing, its chief executive said, more than two months after the Swedish carmaker postponed its flotation blaming trade tensions and an automotive stocks downturn.
Volvo and its parent had been working on an initial public offering, potentially valuing the carmaker at US$16 billion to US$30 billion.
In September, the company dropped the IPO plans but said that a listing was still possible in the future.
"There are no plans or time schedule for entering into the equity market," Chief Executive Hakan Samuelsson told Reuters on the sidelines of the Los Angeles Auto Show on Wednesday.
When asked if the company might instead consider raising funds via convertible bonds, he said: "It's not the right timing and also it's a turbulent market."
An IPO would have helped bolster Volvo's coffers at a time when carmakers need cash to back their plans to develop electric and driverless cars.
Mr Samuelsson reiterated on Wednesday that Volvo, which is developing Polestar as an electrified performance brand and owns a stake in Geely stablemate Lynk & Co, would finance its development using existing cash flows.
He had said in September when the IPO was dropped that the company had "other alternatives" to raise finance.
Conditions in the automotive industry remain tough with the trade conflict between China and US creating headwinds, China car sales falling and new emissions test standards hitting the European market. China is Volvo's largest market.
Profits at Volvo have been squeezed by rising costs due to product launches plus the impact of higher tariffs from a trade spat between Washington and Beijing has escalated.
The US/China trade war could also hurt the pace of expansion at Volvo's new US factory in South Carolina, where it has plans to invest US$1.1 billion and hire about 4,000 people, a spokesman said on Wednesday, confirming comments in US media.
"The plans for Charleston... remains, however trade issues may impact the pace of the expansion, although we cannot quantify the effects," he said.
The company said last week that it had decided to split production of its S60 luxury sport sedan between US and China, changing an original plan to manufacture the vehicle only at its US factory and export it to China.
The spokesman said the S60 would be manufactured in Chengdu from next year to cover domestic sales and exports to some Asia-Pacific markets. The Chengdu plant already manufactures Volvo's top-selling SUV, the XC60, and an old generation of S60L cars.