GENEVA -- Volvo is considering adding an assembly plant in North America to hedge against its heavy dependence on the euro.
Volvo Car Corp. CEO Stefan Jacoby said the company will use "the next two or three years" to ponder the addition of a factory in the United States or Mexico.
"Obviously, one of our weaknesses is that we depend too much on the euro, and we have to take the U.S. dollar and euro equation into consideration," Jacoby said during an interview on the sidelines of the Geneva auto show. "We need to solve that problem; we need to solve that part of the strategy."
He said the "volatility of economies" will be one factor in the decision whether to build or not to build in North America.
Jacoby said last year that the automaker plans to invest as much as $11 billion worldwide by 2016 to tap rising demand in markets that include China. Volvo aims to double global sales to 800,000 cars by 2020, including 120,000 cars in the United States.
Separately, Jacoby said the automaker will consider a partnership to produce a new small-car platform and possibly a three- or four-cylinder engine when the new V40 program is replaced in six or seven years. The V40 launched in Geneva is based on development work completed when Ford Motor Co. owned Volvo.
A Chinese consortium including automaker Zhejiang Geely bought Volvo from Ford Motor Co. for $1.8 billion in August 2010. Zhejiang Geely owns 51 percent of Volvo, while the Chinese provinces of Daqing and Jiading have 37 percent and 12 percent, respectively.
"We will look to do a small engine or compact platform either on our own or in a partnership," Jacoby said. "We're working on that now."
Jacoby said Volvo's immediate need is to expand its manufacturing base in China.
Last month the Swedish automaker announced it will form a carmaking venture with Geely as part of plans to expand in the world's largest vehicle market.
As part of the requirements for a Chinese carmaking joint venture, Volvo also will introduce a new China-only brand and more fuel-efficient vehicles.
Under current rules, Volvo said, the Sweden-based automaker is considered a foreign carmaker despite being wholly owned by Chinese interests and needs a local partner before manufacturing in China.