Volvo hunting for partner to develop compact vehicles

<a href=""; target="_blank">VOLVO</a> Cars is hunting for a partner to share in the development of its compact models.

Chief executive Stefan Jacoby, who took the helm at the Swedish brand when Volvo was bought by China’s Zhejiang Geely for $1.8bn (£1.16bn) in 2010, said a partnership would make sense for the relatively small carmaker to find economies of scale.

Volvo has already entered into a deal with Germany’s Siemens electronics to cooperate on electric car technology.

But Jacoby, who aims to increase global sales from the current level of 450,000 a year to 800,000 by 2020, said further collaboration would be a boost for the company.

Volvo spokesman Duncan Forrester told City A.M.: “No decision has been made but we are open for partners.”

The firm’s current C30 small car is based on technology developed by its former owner Ford Motor.

Volvo is set to launch a new compact car, the V40, at the Geneva Motor Show in March. The new car will replace the Volvo S40 and V50 models but Volvo has not yet said where or how it would make it.

Volvo is not the only brand looking to pair up with other carmakers in a bid to economise.

Daimler is working with Renault and Nissan in areas including small cars.

Jacoby, who is also president of the carmaker, has vowed to cut costs by simplifying Volvo’s operations, including cutting the number of engine types from 10 to two, with one version each in petrol and diesel.