Ghent (Brussels Morning Newspaper) – The new United States import duties will likely have no significant effect on car manufacturer Volvo’s Ghent plant, which produces the EX30. Koen Schoors from Ghent University predicts this assessment. Volvo will operate EX30 electric car manufacturing at its Ghent facility starting next month.
After the announcement of new US import duties, economist Koen Schoors sees few direct consequences for the production of Volvo’s electric EX30 in Ghent. The EX30, an electric SUV set to begin production next month, is also targeted for the American market. However, Schoors suggests that Volvo may initially prioritise European sales before adjusting long-term export strategies. The Ghent plant has deferred an official response to Volvo’s Swedish headquarters, which stated it is still assessing the impact of the tariff changes.
The communications department there provided us with the following ‘vague’ statement:
“We are monitoring developments in various markets, including the US. We are investigating the effects of the tariff changes announced by the US. It is too early to comment further at this time.”
Economist at Ghent University Koen Schoors suspects that Volvo Ghent will feel little of the levies in the short term.
“I think that Volvo will initially focus on the European market and will see how the car sells here. But Volvo will probably have to adjust its export plans to the United States in the long term.”
He does point out that it is difficult to estimate whether the levies will have an impact on employment in Ghent in the long term.
“That will depend on any counter-levies that Europe imposes.”
“The consequence of such counter-levies could be that Volvo Cars and other European car companies will sell more cars within the European market. On the one hand, you lose a piece of the market, while on the other hand you also gain ground within your own economic region.”
According to Schoors, it is not excluded that Volvo will try to tap into other markets in the world.
“The EX30 is a smaller and slightly cheaper car, so it is certainly also a candidate for selling in less developed markets.”
What led to the new us import duties, and how does it affect Volvo’s Gent plant?
The United States imposed a 25% tax on all imported automobiles as part of its strategy to defend US automotive manufacturers. The United States implemented this latest tariff after the Trump administration previously levied tariffs against vehicles from the European Union beginning with a 10% tax before it was elevated to 25%. The EU issued threats of counter-tariffs which elevate the possibility of worsening trade conflict.
The EX30 electric SUV manufacturing at Volvo Car Gent will start in 2024 while the staff численность exceeds 6,500, but the plant anticipates international distribution, including US markets. The global sales performance of Volvo Cars reached more than 700,000 vehicles in 2023, while its US customer base contributed approximately 20% to its total market. The Ghent plant operates as Volvo’s significant manufacturing facility, producing approximately 200,000 cars each year.
The current European focus of production and delivery means that the initial market impact remains restricted, but US access faces potential long-term challenges.
Previously, the EU reacted to US trade actions by imposing duties on motorcycles and bourbon and may implement further trade changes in the future. Volvo’s strategic decisions will depend on how the EU proceeds regarding its discussions about exemptions or the application of required countermeasures.
