Monday 6 April 2015

Battered by currency swings, European firms unpick global production model

A picture illustration shows U.S. Dollar and Euro banknotes on a pair of scales in Vienna A dramatic fall in the euro has created an opportunity for European manufacturers to enjoy cheap production costs at the bases from which they can supply world markets. Sweden's Volvo Cars is one such firm embracing regionalization. Last month it announced plans to build a $500 million plant in the United States, looking past the dollar's current strength to build in a longer-term protection. "We're eliminating short-term currency fluctuations, which are never good for long-term commitment to customers in different regions, and we're creating a natural hedge," explained Volvo Chief Executive Hakan Samuelsson.




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