The fact that the Belgian federal government has set up a ‘task force’ to consider the future of Belgium’s only surviving large car assembly plant in Ghent, operated by Volvo, has set off several alarm bells. Despite the soothing words of Flemish Minister-President Mathias Diependaele, concerns are rising.
The different rumors are also fed by rather morose Q1 2026 results for Volvo Cars. During the first three months of the year, Volvo delivered 153,316 cars worldwide, an 11% decline. Turnover decreased by 12% to €6.7 billion, and EBIT decreased by 17%.
The two most important single markets for Volvo Cars, China and the U.S., saw clear declines of 18% and 32%, respectively. But sales are also slow in Europe: -11% in Sweden, -25% in Germany, -14% in Belgium, … One positive point: sales of full-electric vehicles rose by 12%.
Volvo Cars still foresees a headwind in the second quarter of the year, but nevertheless expects to sell more cars this year than in 2025, thanks to the launch of the all-new and fully-electric EX60. “Orders are above expectations, and also the margins on the ordered cars exceeded our expectations,” the company states.
Ghent
At the moment, Volvo’s Ghent factory employs some 6,500 people and has produced 212,177 cars in 2025 (+13.9%). In Ghent, Volvo is assembling the older ICE models, the XC40 and V60, and the more recent electric models, the EX40, EC40, and EX30. More than one-third of the cars produced are fully electric.
Until now, Ghent was the second Volvo factory in Europe, besides Torslanda (Gothenburg, Sweden), but a third factory in Kosice (Slovakia) will open soon. There is a possibility that Ghent will lose some of its electric models to be assembled at this brand-new, state-of-the-art plant in Eastern Europe.
The main qualities of the Ghent plant have always been its exceptionally good location in the port of Ghent and the very high quality of its disciplined, skilled workforce. The disadvantages are also clear: relatively high labor costs and, even more important, high energy tariffs.
The wrong decisions
In 2022, then Volvo Cars CEO Hakan Samuelsson left the company in very good shape, highly appreciated by its Chinese owners, Geely Holding. At its peak, the company produced over 800,000 cars and was fully committed to the energy transition, with plans to fully electrify the entire Volvo portfolio by 2030.
The rising competition of Chinese brands (also inside the Geely holding by ‘Volvo derivatives’ like Polestar) and the complete policy change in the U.S. toward EVs changed the rules. When other European car manufacturers also lobbied at the EU Commission to soften the ‘Green Deal’ and its electric ambitions, the first red lights were flashing in Volvo’s Swedish headquarters, and the highly esteemed Samuelsson was recalled to put things in order.
Unfortunately, what happened in between is still having a costly influence on the Swedish car maker, and, as it seems now, especially on the future of its Ghent plant. Samuelsson’s successor was Jim Rowan, who came from the ‘Hoovering company’ Dyson and arrived in Sweden with enormous ambitions, but little experience of running a car company.
Rowan wanted Volvo Cars to produce and sell more than a million cars in Europe alone, and to that end, a third factory on the old continent was needed. The choice went to Kosice, Slovakia, now already the leading car assembly country per capita, because of its lower wages and relatively well-educated workforce.
This proved to be a major overestimation of Volvo Cars’ market capabilities and investment opportunities, but the factory is ready and will start production soon. The result is a real threat to Ghent, where workers are paid more, energy is more expensive, and production facilities are somewhat outdated compared to a brand-new location.
What can the Belgian government(s) do?
A former task force started saving Audi Brussels some time ago, but it wasn’t very successful, to say the least. Will the new initiative from the Belgian federal and Flemish governments have more impact?
Of course, the already cited trump cards of the Ghent factory remain. But Volvo Cars’ current CEO, Samuelsson, has already stated several times that the main objective for Volvo Ghent’s future survival is cost reduction.
With a federal budget deep in the red, the Belgian government has to be very careful about what it promises Volvo/Geely to stay here. At the same time that the task force met with local Volvo management, Belgian Foreign Minister Prévot met with Geely’s top management in China.
According to Prévot, the Chinese are certainly open to negotiating, but they are tough negotiators. The fact that Geely Auto uses the same electric platforms across several of its brands (Volvo, Polestar, Zeekr, Geely, Lynk & Co, Smart, …) can surely be helpful in the future. But Ghent and Belgium will have to be creative, conscious of the disadvantages, and prepared to cure them. Starting with the energy cost. Perhaps, from this perspective, it’s not such bad news that the Belgian government is considering nationalizing the country’s nuclear industry and reopening nuclear power stations.
