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Volvo to Tighten U.S. Dealer Network

According to Automotive News, Volvo plans to cut its U.S. dealer network 30 percent by the end of next year.

"This measure will strengthen the remaining dealers," company spokesman Olaf Meidt told Automobilwoche, which, like Automotive News, is published by Crain Communications Inc. Volvo, which has about 355 U.S. dealers, blamed massive losses in its U.S. business for the move.

Over the past five years, Volvo reportedly lost 1.1 billion euros ($1.73 billion at current exchange rates) in the U.S. market because of the weak dollar.

The Swedish unit of Ford Motor Co. sells the largest share of its total production in the United States, corresponding to 23 percent of output. Volvo production was 461,108 units in 2007.

Most Volvo models saw U.S. sales declines in 2007. The S60 sedan declined 28.1 percent from the previous year to 18,511 vehicles. Sales of the XC90 crossover fell 5.6 percent to 31,336 vehicles. Sales of the V70 station wagon fell 7.7 percent to 29,938 vehicles.

Volvo's U.S. sales fell to 7,001 vehicles in June, down 26.9 percent from June 2007. For the first half of the year, Volvo sold 46,181 vehicles in the U.S., down 14.2 percent from the same period of 2007.