Swedish car maker Volvo, owned by Chinese group Geely, said on Monday its sales fell 6.1 percent last year, including double digit drops in China and Sweden and a small rise in the United States, and expected a tough 2013.
Volvo is the biggest Chinese overseas investment in the auto industry and the Swedish company is pinning its growth hopes on China. Overall sales fell last year to 421,951 cars from 2011's 449,255, the group said in a statement.
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"Competition in the car industry will most likely continue to be as fierce as in 2012 as manufacturers will seek to capture volumes and market shares in a market where the economic situation will remain unstable," it said, expecting a challenging year in terms of margins and growth.
It said several markets last year reported improvements, particularly emerging and overseas markets, but that the economic situation in mature markets and regions hit demand.
Volvo, bought from Ford Motor Co by Zhejiang Geely Holding Group for $1.8 billion in 2010, aims to spend about $11 billion to double total annual sales to 800,000 cars by 2020 and boost sales in China to 200,000, from only 41,000 last year, which was a drop of 10.9 percent.
The U.S. market remained the single biggest for Volvo at 67,273 last year, up 1.2 percent.
Volvo said it expected a new plant in Chengdu in China, aimed at being a key part of the expansion plan in the country, to be up and running in the second half of 2013.
Volvo last year fired its German chief executive and replaced him with Swedish truck sector veteran Hakan Samuelsson as it seeks to get its China growth plans back on track.
(Reporting by Patrick Lannin, editing by Niklas Pollard)